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GOLD  AND  DEBT; 

AN  AMERICAN 

HAND-BOOK  OF  FINANCE, 


WITH  OVER  EIGHTY  TABLES   AND   DIAGRAMS  ILLUSTRATIVE 
OF  THE   FOLLOWING   SUBJECTS: 


THE  DOLLAR  AND  OTHER  UNITS;  PAPER  MONEY  IN  THE  UNITED 
STATES  AND  EUROPE;    GOLD   AND   SILVER  IN  THE  UNITED 
STATES  AND  EUROPE;  SUSPENSIONS  OF  SPECIE  PAY- 
MENTS;   THE  ERA  OF  GOLD;    VALUES  OF  THE 
PRECIOUS  METALS;   THE  ERA  OF  DEBT; 
THE  RISE  AND  FALL  OF  PRICES; 


ALSO,   A  DIGEST   OF  THE 


MONETARY  LAWS  OF  THE  UNITED  STATES. 


BY  W.  L.  FAWCETT. 


SECOND    EDITION. 


CHICAGO: 
S.  C.  GRIGGS   AND    COMPANY. 

1879. 


Copyright,  1876. 
BY  S.  C.  GRIGGS  AND  COMPANY. 


KNIGHT  <fc  LEONARD,   PRINTERS,   CHICAGO. 


.  ZEESE4C0.,  ELECTROTYPES, 


ttCr 

■ 


PREFACE 


rpHE  author's  first  object  in  this  book  was  the  compi- 
J-    lation,  in  a  compact  form,  convenient  for  reference, 
of  trustworthy  statements  and  figures    regarding  the 
■   great  factors  in  the  financial  problems  of  the  day,  and 
-  to  which  reference  is  continually  made  in  financial  dis- 
cussions, viz.:  the  increase  and  decrease  of  the  volume 
of  paper  money  at  various  periods  in  the  United  States 
and  in  Europe  during  the  last  fifty  years;   the  pro- 
j  duction  of  gold  and  silver,  and  the  consumption  of  these 
?  metals  in  the  arts  since  the  beginning  of  the  era  of 
^A,  gold  in  1849 ;  the  additions  to  the  world's  stock  of  gold 
*  and  silver  used  as  money,  and  the  amounts  now  in  use 
in  all  countries ;  and  the  increase  of  debts  and  traffic  in 
this  age  of  steam ;  also,  in  the  compilation  of  monetary 
laws  of  the  United  States,  to  set  forth  in  the  language 
of  the  laws   themselves    the    nature   of  the   contract 
between  the  government  as  a  borrower  and  the  note 
and  bond  holders  as  creditors. 

Whatever  of  a  theoretic  nature  there  is  in  the 
following  pages  has  not  been  prompted  by  any  pre- 
conceived  notions,   nor   written    in    advocacy   of  any 


4  PREFACE. 

scheme  for  ameliorating  the  financial  troubles  of  the 
times,  but  has  in  each  case  been  incidental  to  the  state- 
ment of  the  facts.  If  others,  upon  the  basis  of  the  same 
facts,  should  arrive  at  different  conclusions,  it  should 
not  render  this  compilation  of  facts  any  the  less  valu- 
able as  a  book  of  reference,  which  it  was  the  author's 
aim  to  make. 

Chicago,  Dec.  6,  1876. 


TABLE  OF  CONTENTS. 


THE  DOLLAR  AND   OTHER  UNITS. 

Monetary  units  of  all  countries  (Tables  4,  5  and  6), 

In  many  cases  only  ideal  coins,         .... 

The  pound  sterling-  and  the  dollar  as,  - 
The  dollar  —  origin  of  the  dollar  symbol, 

Origin  of  the  name, 

American  —  of  the  Confederation,    - 

American  —  of  the  United  States,         - 

Reduction  in  value  of  United  States  dollars  in  1837, 

Abolition  of  the  American  silver  dollar, 

The  London  Stock  Exchange  dollar, 

The  "dollar"  in  Frankfort  and  Paris,  - 
Ideal  moneys, 

Of  international  exchange, 

Of  the  mediseval  banks, 

Change  from  a  silver  to  a  gold  currency  in  the  United  States 

in  1837, 

Similar  changes  in  France  in  1785  and  Austria  in  1857, 

PAPER  MONEY   AND   COIN   IN  THE  UNITED   STATES. 

Paper  money  and  coin  in  the  United  States,    -        -        -  27 
Table  of  the  amounts  of  each  in  use  each  year  from  1854 

to  1876, 34,  35 

Period  of  greatest  contraction, 32 

Amount  of  coin  in  the  United  States,  1854  to  1876,          -  35 

The  United  States  banks, 55 

Estimated  number  of  each  class  of  banks  in  the  United 

States  in  1875,  and  the  aggregate  of  their  deposits,  -  36 
5 


259-264 

15 

17-19 

13 

22 

19,  170 

17.  171 

21-175 

180 

25 

26 

49 

19 

38 

21 

21 

TABLE   OF   CONTENTS. 


PAPER   MONEY  IN   EUROPE. 


Paper  money  in  Europe, 38 

Invention  of, 40 

First  used  in  Sweden, 40 

Table  of  amounts  in  Great  Britain  at  various  periods,  -  43 

France  at  various  periods,          ...        -  44 

Germany  at  various  periods, 44 

Austria, 46 

Russia, 48 

Italy, 49 

Switzerland, 51 

Table  of  aggregate  in  Europe, 52 

Increase  of  in  Europe, 52 

Great  banks  of  Europe, 49 

Banks  of  Venice,  Barcelona,  Genoa,  Amsterdam,  etc.,  38 

Bank  of  England, 40 

Joint- stock  banks  in  Great  Britain,       ....  40 

Bank  of  France, 43-57 

Specie  in, 70,  85 

Imperial  Bank  of  Germany, 44 

Bank  of  the  Empire  of  Russia, 47 

National  Bank  of  Italy, 49-60 

National  Bank  of  Spain,      ------  50 

Banks  in  Switzerland,                ...  51 

Bank  of  Belgium, 51 

Banks  in  Sweden, 52 

SUSPENSIONS  OF   SPECIE  PAYMENTS  IN   ALL  COUNTRIES. 

Suspensions  in  the  United  States, 54 

The  Bank  of  the  United  States,        -  55 

The  suspension  of  1862,        ------  55 

Depreciation  in  value  of  the  currency  each  year,       -  56 

In  Great  Britain,  1791  to  1821, 57 

Of  the  Bank  of  France  in  1848  and  1870.  -  57 
Remarkably  slight  depreciation  of  the  notes  of  the  Bank 

of  France  (see  note  to  page  557),  -        -        -        -  58 

Austria, 59 

Italy, 60 

Russia, 48,  61 


TABLE    OF    CONTENTS.  7 

Brazil, 61,  89 

Various  effects  of  on  value  of  currency,         ...  §2 

Inconvertible  paper  money — three  causes  affecting  its  value,  62 
Its  increase  in  value  by  reason  of  scarcity  of  any  other 

medium  of  exchange, 63 

Its  stimulating  effects  on  industry  and  trade,        -        -  64 

GOLD  AND   SILVER  COIN  IN   EUROPE. 

Estimated  stock  of  gold  and  silver  in  Great  Britain,    -        -  66 

France, 67-72 

Germany, 72-75 

The  method  adopted  by  the  author  of  this  book  for  approxi- 
mating the  amount  of  gold  and  silver  in  each  country,  75-80 

Table  of  approximate  amount  of  coin  in  each  country  in 

Europe, 82 

All  estimates  in  regard  to  Asia  entirely  conjectural,        -  95 

Lavish  use  of  both  gold  and  silver  in  Asia  for  personal 

ornaments  (foot  notes), 92,  93 

The  stock  of  gold  and  silver  in  Asia  not  a  source  of  supply 

for  Europe  or  America, 92,  93 

Probable  stock  of  gold  and  silver  coin  in  the  world,     -  95 

AVERAGE  RATIO  OF  NATIONAL  REVENUE  TO  VOLUME 
OF  MONEY  IN  USE  IN  ALL  COUNTRIES. 

The  ratio  of  national  revenue  to  the  total  volume  of  money 

in  all  countries, 78 

Table  showing  the  uniformity  in  the  proportions  of  money 
and  national  revenue  per  capita  of  the  population  in 
all  countries, 78 

The  average  amount  of  annual  national  revenue  about  38  to 

40  per  cent  of  the  total  volume  of  money  in  use,       -  79 

Striking  illustration  of  the  above  rule  in  the  proportions  of 
annual  revenue  to  the  volume  of  money  in  use  in  the 
United  States  each  year  from  1866  to  1876  (note  to 
page  243), 79 

COIN  AND  PAPER  MONEY  IN  THE  WORLD. 

Total  of  paper  money  and  coin  in  Europe,           ...  83 

United  States, 34,  35 


8  TABLE   OF   CONTENTS. 

Canada,        -                                 87 

Mexico, 88 

Brazil,           -                                   88 

South  America, 90 

Asia, 95 

The  World, 95 

Diagram  showing  the  approximate  volume  of  paper  money 
in  the  world  each  year  from  1845  to  1875,  and  the 
relative  decrease  in  the  amount  of  gold  and  silver,    -  128,  129 

THE  ERA  OP  GOLD. 

The  average  annual  product  of  gold  prior  to  about  1825  was 

thirteen  millions  to  fifteen  millions  dollars,    -        -  98 

Increased  to  about  forty-three  millions  dollars  per  annum 

between  1825  and  1848, 98 

The  great  increase  from  the  placers  of  California  and  Aus- 
tralia mark  the  beginning  of  the  era  of  gold,         -  99 

Table  of  the  product  in  the  various  quarters  of  the  globe,    -  101 

Product  of  gold  and  silver  in  the  United  States,      -        -  102 

Annual  consumption  of  gold  in  the  arts  — Table  of,     -        -  114 

Jacob's  estimate  in  1830, 108 

McCulloch's  estimate  in  1857, 109 

Author's  estimate  of  total  annual  production,  consumption 

and  addition  to  stock  in  the  world  from  1840  to  1875,  110 

Diagram  showing  estimated  production  and  consumption  of 

gold  and  silver, 114,  115 

Production,  consumption  and  exports  of  silver  for  the  United 

States,      -                                 112 

Annual  movement  of  silver  to  Asia,        ...        -         96-111 

The  end  of  the  golden  era  about  1862,         ....  145 

VALUES  OF  THE  PRECIOUS  METALS. 

The  values  of  gold  and  silver  largely  adventitious,      -        -  134,  139 

Great  changes  in, 142 

Depreciation  in,  from  1849  to  1854,       -  129 
Cause  of  the  decline  of  silver  with  the  decline  of  gold  after 

1849, 133 

Relative  values  of  gold  and  silver,  in  accordance  with  the 

experience  of  two  hundred  years,      -        -        -  139 


TABLE   OF   CONTENTS.  9 

Tables  of  relative  values  of  gold  and  silver,  -  -  -  141,  142 
Diagram  showing  the  course  of  relative  values  from.  1840  to 

1876, 151,  152 

Table  of  the  relative  legal  values  of  gold  and  silver  in 

various  countries, 144 

Relative  values  of  gold  and  silver  in  the  United  States  by 

the  law  of  1792,    -------      140,  171 

The  Latin  Monetary  Union, 144,  145 

Demonetization  of  silver  in  Great  Britain  in  1816,  -  145 

Effects  in  1872-3  of  the  British  law  of  1816,        -        -        -  145 

The  exclusive  gold  standard  of  values  impossible  for  all 

nations, 137 

Exclusive  standards  of  either  metal  in  different  countries 

inimical  to  the  comity  of  nations,       -        -        -        -  138 

Report  of  the  British  Parliamentary  Commission  of  1876  on 

the  depreciation  of  silver, 135 

THE   ERA   OF   DEBT. 

Growth  of  national  debts  in  the  last  twenty-five  years,        -  115 

Railroad  debts  of  the  United  States  and  of  the  world,  117 

Municipal  debts  in  the  United  States  and  Europe,        -  118 

American  State  and  county  debts, 121 

Aggregate  of  funded  debts  in  the  world,     -  122 

Impossibility  of  liquidation, 122 

Aggregate  annual  interest, 123 

Lower  rates  of  interest  the  necessary  consequence  of  previous 

high  rates, 122 

Seven  thousand  millions  of  war  debts  created  in  eleven 

years,  from  1860  to  1871, 148 

The  difference  between  the  burden  of  war  debts  and  the 

debts  of  enterprise, 133,  134 

Narrow  views  of  financiers  and  statesmen  on  the  question 

of  great  debts, 148 

PRICES   OF   COMMODITIES   IN   GOLD. 

Table  of  the  rise  in  average  prices  from  1849  to  1854.     The 

latter  compared  with  1875, 130,  131 

Cause  of  the  great  rise  of  prices  from  1862  to  1867,     -        -  131 

Causes  of  the  reaction  in  1872-3, 134 


10  TABLE   OF   CONTENTS. 

Diagram  showing  the  course  of  prices  of  commodities  from 

1840  to  1875, 141,  142 

PROGRESS  OF   THE  AGE. 

Traffic  has  nearly  quadrupled  in  twenty-five  years,      -        -  124 

Increase  in  the  value  of  railroad  tonnage,       -        -        -  126 

Table  of  the  railroad  mileage  of  each  country  in  the  world,  117 
Increase  of  bank  clearings    in    the    United    States    and 

England, 124,  125 

Extent  of  the  economization  of  currency  by  the  clearing- 
house system, 126 

Agencies  at  work  toward  a  new  financial  era,          -        -  147 

MONETARY  LAWS  OF   THE  UNITED   STATES. 

Revision  of  the  laws  of  the  United  States  in  1873,       -        -  167 
Coinage  laws — all  the  clauses  of  all  laws  relating  to  the 
weight,  fineness  and   legal-tender  value  of   United 
States  and  foreign  coins,  from  1781  to  1876,  chrono- 
logically arranged, 170-182 

The  silver  dollar  the  unit,        -  170,  171,  175,  176 

Half  dollars,  their  legal  weights  and  values,        -        -        -  171,  175 
Reduction  in  value  of  half  dollars  and  other  fractional  coins. 
Fractional  coins  no  longer  legal-tender  for  more  than 

five  dollars, 177 

Eagles, 171,  175 

Change  in  the  value  of,  in  1837,        ....      171,  175 

The  gold  dollar  authorized, 176 

Made  the  unit  of  values, 180 

The  trade  dollar, 180,  181 

Legal  method  of  computing  the  value  of  the  pound  sterling,  182 

Laws  authorizing  the  issue  and  redemption  of  United  States 
notes  and  bonds,  chronologically  arranged,  from  1860 

to  1876, 183-202 

United  States  notes  made  legal-tender  for  all  debts, 
except  duties  on  imports  and  interest  on  the  public 
debt;  Acts  Feb.  25,  1862;  July  11,  1862,  and  March 

3>  1863- 186,  189,  190,  191 

Made  receivable  the  same  as  coin  for  nil  lonns  nego- 
tiated by  the  United  States;  Act  Feb.  25,  1862,         -  186 


TABLE    OF    CONTENTS.  11 

Made  receivable  in  payment  of  all  loans  made  to  the 

United  States;  Act  July  11,  1862,          ...  188 

Sinking  Fund  Act  of  Feb.  25,  1862, 187 

Pacific  railroad  bonds, '  187 

Amendment  to  Pacific  Railroad  Act  of  July  2,  1864,    -        -  194 

Public  Credit  Act, 197 

Funding  Act  of  July  14,  1870, 197 

Specie  Resumption  Act  of  Jan.  14,  1875,          -  200 

Subsidiary  Silver  Coin  Law  of  July  13,  1876,       ...  201 


PUBLIC  DEBT  AND  FOREIGN  TRADE. 

Table  of  amount  of  each  form  of  obligation  of  the  United 

States  outstanding,  each  year  since  1860,  -        -        -  152,  153 

Total  debt  each  year  since  1791, 154 

Foreign  indebtedness  of  the  United  States,  ...  156 

Imports  and  exports  of  merchandise  and  specie,  each  year 

since  1843, 159,  161 

Foreign  trade  balances  for  and  against  the  United  States, 

each  year  since  1843,     -        -        -        -        -        -  162 

Authority  of  the  Secretary  to  make  interest-bearing  treasury 

notes  legal  tender;  Act  March  3,  1863,  -  -  -  190,  191 
"  Seven- thirty  "  treasury  notes  made  a  legal  tender;  Act 

June  30,  1864, 193 

Fractional  currency, 192 

NATIONAL  BANKS  AND   BANK   CURRENCY. 

Organization  and  powers  of  national  banks,    -        -        -  203 

Obtaining  and  issuing  circulating  notes,      -        -        -  214 

Regulation  of  the  banking  business,        ...        -  202 

Dissolution  and  receivership, 235 

Taxes  on  circulating  notes, 244 

Stamp  tax  on  checks, 246 

Crimes  and  misdemeanors, 248 

Interest  laws  of  the  States, 254 

[In  addition  to  the  above  captions  there  are  marginal  notes  which 
furnish  a  complete  index  to  all  important  clauses  under  each  general 
head.] 


12  TABLE   OF   CONTENTS. 


REFERENCE   TABLES. 


Table  1. — National  Banks  in  the  United  States  each  year 

since  1863, 256 

Tables  2  and  3. — Relative  Values  of  Gold  and  United  States 

Notes,  with  gold  at  any  price  not  exceeding  285,       -  257,  258 

Tables  4  and  5. — Monetary  Units  of  all  Countries,  with 
the  declared  values  of  their  coins  in  United  States 
money,  January  1,  1874, -  259 

Table  6. — Monetary  Units  of  all  Countries,  and  the  declared 

values  of  their  coins,  January  1,  1876,      -        -        -  264 

Tables  7  and  8. — Prices  of  Leading  Staple  Commodities  in 

New  York  for  Fifty  Years, 265-267 

Table  of  Population  of  each  Country  on  the  Globe  in  the 

period  1874-6, 268-270 


THE  MONEY  SYMBOLS. 


ON  the  cover  of  this  book  are  grouped,  in  one  design, 
the  three  emblems  from  which  are  derived  the  dol- 
lar symbol,  $,  and  the  pound-sterling  symbol,  M.  The 
most  prominent  and  interesting  feature  of  the  group  is 
the  two  pillars,  which  were  derived  from  the  pillars  of 
Hercules,  one  of  the  oldest  symbols  known  to  the 
human  race.  Their  composition  with  the  money  sym- 
bols is  due  entirely  to  the  emperor  Charles  the  Fifth  of 
Germany,  who  being  also  king  of  Spain  adopted  them 
as  supporters  on  either  side  of  his  escutcheon,  and  also 
placed  them  in  the  device  on  the  Spanish  "pillar  dollar" 
of  the  value  of  fifty-four  pence  sterling,  which  became 
the  unit  of  Federal  money  in  America,  and  upon  the 
basis  of  which  the  pound  sterling  was  valued  at  $4.44.44. 
Charles  derived  the  idea  from  the  poetic  conceit  which 
gave  the  name  of  "Pillars  of  Hercules"  to  the  two 
mountains  which  stand  on  either  side  the  Straits  of 
Gibraltar,  viz. :  Calpe,  or  the  Eock  of  Gibraltar,  on  the 
north,  and  Mount  Abyla,  in  Africa,  on  the  south.  The 
scroll,  which  in  the  device  on  the  dollar  was  twined 
about  the  pillars,  has  by  long  use  been  gradually  modi- 
fied, in  making  the  symbol  with  the  pen,  so  as  to 
assume  its  present  form  in  the  dollar-mark.  It  is  also 
presumed  that  in  the  pound-mark  the  «2f  was  substituted 
for  the  scroll,  thus  still  retaining  the  two  pillars  which 


14  THE    MONEY    SYMBOLS. 

had  become  what  might  be  called  the  generic  symbol 
of  money  in  general,  while  the  scroll  and  the  Jz?  referred 
to  the  two  monetary  units  most  widely  known  to  the 
world  —  the  J2f  being  from  Libra,  a  balance;  or,  in  this 
connection,  a  standard  of  values.  But  before  Charles 
adopted  the  pillars  as  supporters  to  his  arms,  they  had 
been  part  of  the  metropolitan  emblem  of  the  city  of 
Seville,  and  the  scroll  bore  the  device  Ne  plus  ultra, 
referring  to  the  ancient  belief  that  westward  of  that 
coast  of  Spain  there  was  nothing  but  sea  and  space. 
Charles  elided  the  particle  ne,  and  left  the  motto  Plus 
ultra,  in  which  form  it  appeared  in  the  arms  of  the 
Empire  and  on  the  pillar  dollar.  Originally  the  pound- 
sterling  symbol  was  made  with  two  transverse  bars. 
The  custom  of  making  it  with  only  one  horizontal  bar, 
and  the  dollar-mark  with  only  one  upright  bar,  is  an 
innovation  of  modern  type  makers. 


THE  DOLLAR  AND  OTHER  UNITS. 


ALL  national  governments  assume  the  right  to  estab- 
lish a  monetary  unit,  viz. :  to  select  a  certain  coin, 
either  of  gold  or  silver,  in  which  accounts  shall  be  kept 
within  their  territory.  Also  to  coin  money  and  regu- 
late the  legal  tender  value  of  their  own  coins  and  also 
of  foreign  coins,  viz. :  to  declare  at  what  proportion  of 
the  monetary  unit  the  coins  shall  be  received  in  pay- 
ment of  debts.  But  the  declared  or  legal  tender  value 
of  coins  does  not  always  agree  with  the  bullion  value 
of  the  coin  selected  as  the  monetary  unit.  In  fact  there 
have  been,  until  within  the  last  half  century,  very  few 
instances  in  which  the  bullion  value  of  the  national  coins 
of  any  country  have  corresponded  to  the  bullion  value  of 
the  coin  selected  as  a  monetary  unit.  This  discrepancy 
has  arisen  from  two  causes.  First,  because  —  for  their 
own  purposes  —  national  governments  in  the  exercise  of 
their  right  to  coin  money  and  regulate  the  value  thereof, 
have  frequently  changed  the  bullion  value  of  the  coins 
struck  at  their  national  mints,  while  the  monetary  unit 
being  in  most  cases  an  ideal  coin,  or  at  least  a  coin  which 
had  disappeared  from  circulation  in  any  part  of  the 
world,  could  not  be  changed  except  by  legislation  to 
change  the  unit  of  values  ;  an  act  which,  in  justice  to  all 
debtors  and  creditors  in  the  country,  would  require  that 
there  should  be  a  concurrent  and  corresponding  change 
in  the  amount  of  all  debts  and  accounts  kept  in  accord- 


16  HAND-BOOK   OF   FINANCE. 

ance  with  the  former  unit  of  values.  The  second  cause 
of  the  general  discrepancy  between  the  bullion  value  of 
the  monetary  unit  of  any  country  and  the  bullion  value 
of  the  coins  minted  in  the  same  country  is  the  differ- 
ence in  the  relative  values  of  gold  and  silver.  The 
monetary  unit  being  in  all  cases  only  one  coin,  of  one 
metal,  the  changes  in  the  relative  values  of  gold  and 
silver  would  cause  continual  changes  in  the  values  of 
the  coins  of  the  respective  metals. 

There  is  reason  for  believing  that  the  phrase  "  double 
standard,"  as  popularly  used  with  reference  to  countries 
where  both  gold  and  silver  coins  are  a  legal  tender  in 
any  amount,  is  generally  misunderstood.  The  standard 
in  all  countries  must  be  the  monetary  unit  established 
by  law,  and  as  a  unit  means  one  there  cannot  be  "  two 
units."  The  proper  phrase  with  reference  to  the  mon- 
etary systems  of  such  countries  would  be  "  double  legal 
tender,"  or  legal  option  of  payment  of  debts  in  either 
gold  or  silver  coins  at  their  declared  legal  (not  bullion) 
value,  proportionately  to  the  established  monetary  unit. 

But  besides  the  monetary  units  established  by  differ- 
ent countries  there  are  other  ideal  moneys  or  ideal  quan- 
tities of  pure  gold  or  silver  which  have  been  selected, 
not  by  law,  but  by  the  custom  of  merchants,  for  the 
measurement  of  the  coins  of  different  countries  in  trans- 
actions of  international  exchange.  These  have,  in  most 
cases,  been  selected  to  correspond  with  the  value  of  cer- 
tain coins  which  have  had  at  some  time  a  wide  interna- 
tional circulation.  These  are  called  "moneys  of  ex- 
change," and  do  not  necessarily  agree  with  any  of  the 
monetary  units  established  by  different  countries  nor 
with  the  values  of  coins  struck  at  the  mints  of  any 
country. 


THE    DOLLAii   AND    OTHER    UNITS.  17 

In  order  to  have  a  perfect  idea  of  the  function  of 
moneys  of  exchange,  or  ideal  moneys,  which  are  with 
respect  to  coins  as  measures  with  respect  to  goods,  it 
must  be  borne  in  mind  that  pure  gold  or  silver  is  the 
only  universal  currency, — not  gold  nor  silver  coins,  for 
the  nominal  values  of  all  these  are  arbitrarily  fixed  by 
legislation,  which  is  necessarily  confined  within  local 
limits.  The  only  true  denomination  of  coins,  to  make 
them  agree  with  the  universal  currency,  would  be  by 
having  the  ounces,  pennyweights  and  grains  of  pure 
metal  which  they  contain  stamped  on  them.  If  a  sov- 
ereign was  stamped  "  113.001  grains  of  pure  gold,"  and 
a  half  eagle  was  stamped  "  116.100  grains  of  pure  gold," 
their  relative  value  would  be  patent  to  all  people  of 
other  nations  who  understand  the  Arabic  numerals, 
even  though  they  might  not  be  conversant  with  the 
domestic  decimal  system  of  the  United  States  or  the 
English  system  of  sterling  money.  Indeed,  such  a 
nomenclature  for  coins  seems  to  have  been  contem- 
plated in  the  original  divisions  of  British  money  into 
"pounds,"  "ounces"  and  "pence"  or  "pennies." 

Originally  the  pound  sterling  represented  a  pound 
weight  of  silver,  or  about  three  times  its  present  value, 
but  it  was  being  continually  changed  to  suit  the  pur- 
poses of  different  monarchs,  and  through  these  changes 
in  the  coins  the  divisions  of  money  were  finally  changed 
from  pounds,  ounces  and  pennies  —  or  pennyweights  — 
to  pounds,  shillings  and  pence.  In  1266  an  attempt 
was  made  to  find  a  natural  standard  for  the  divisions 
of  money,  and  it  was  enacted  (3d  Edw.,  51)  that  "  an 
English  peny  called  a  sterling,  round  and  without  clip- 
ping, shall  weigh  thirty-two  wheat  corns  from  the  midst 
of  the  ear,  and  twenty  pence  to  make  an  ounce,  and 


18  HAND-BOOK    OF    FINANCE. 

twelve  ounces  one  pound,  and  eight  pounds  one  gallon 
of  wine,  and  eight  gallons  of  wine  one  London  bushel," 
the  money  standards  and  the  measures  of  capacity  beiug 
originally  parts  of  one  series.  The  original  grains  of 
wheat  were  soon  after  the  above  period  represented  by 
metallic  grains,  which  are  supposed  to  be  the  origin  of 
our  modern  troy  grains,  though  the  troy  pound  was 
afterward  changed  to  twenty-four  grains  to  the  ounce, 
and  the  pound  itself  cut  into  twenty  shillings  for  the 
money  measure,  instead  of  twelve  ounces,  the  "penys" 
or  "  sterlings "  becoming  pence  in  money  and  penny- 
weights in  troy  weight.  The  origin  of  the  farthings 
of  sterling  money  was  in  the  manner  of  minting  the 
"peny,"  which  was  stamped  with  a  deeply  impressed 
cross,  so  that  it  could  be  broken  in  twain,  or  into 
fourths ;  hence  fourthings,  which  was  afterward  cor- 
rupted into  farthings. 

The  natural  standard  of  wheat  grains  —  which  wTas 
found  variable  and  altogether  unreliable  —  having  been 
abandoned,  the  alterations  of  the  money  standards  con- 
tinued the  same  as  before :  Elizabeth  ordered  the  ounce 
cut  into  sixty  pence  instead  of  twenty.  Henry  YIII 
debased  the  fineness  and  altered  the  weights  of  the 
coins  so  much  that  at  times  none  but  experts  knew 
their  real  value.  The  "  nobles "  and  "  rose  nobles " 
and  "angels  "and  "guineas"  and  u  sovereigns "  were 
only  so  many  names  given  to  disguise  the  changes 
in  the  value  of  the  gold  coins  that  were  the  nominal 
representatives  of  a  pound  of  silver. 

A  historical  table  of  the  coinage  of  England  shows 
that  in  the  time  of  Edward  III  a  pound  troy  weight 
of  standard  gold  was  coined  into  £14  Os.  lOd.  of  sterling 
money.     From  that  time  down  the  value  of  the  coinage 


THE    DOLLAR   AND    OTHER    UNITS.  19 

was  diminished  under  almost  every  monarch,  until  in 
1717  a  pound  troy  weight  of  the  same  standard  gold 
was  coined  into  £46  14s.  6d.  During  these  five  hun- 
dred years  the  gold  coins  were  thus  debased  in  the  ratio 
of  3^  to  1,  and  the  silver  coins  in  the  ratio  of  99  to  32. 
During  the  same  period  the  silver  coins  of  France  and 
Spain  were  debased  in  the  ratio  of  17  to  1.  This  trick 
of  royalty,  however,  became  stale  in  the  latter  part  of 
the  sixteenth  century ;  and  though  it  continued  to  be 
practiced  to  some  extent  its  effects  were  nullified  in  a 
great  measure  by  the  clumsiness  with  which  it  was 
done.  The  people  of  Europe,  too,  began  to  get  better 
acquainted  with  each  other.  Merchants  of  different 
countries  mutually  agreed  on  moneys  of  exchange  as  a 
measure  of  the  value  of  coins;  the  ideal  standards  thus 
established  were  practically  beyond  the  reach  of  legis- 
lation by  single  nations,  and  the  ideal  "dollar"  or 
"  pound  "  or  "  florin  "  of  exchange  always  demanded 
and  received  its  full  quantity  of  pure  gold  and  silver. 

In  1786  the  Congress  of  the  Confederation  of  Amer- 
ican States  established  the  dollar  of  4s.  6d.  (54  pence 
sterling)  as  the  money  of  account  for  government  con- 
cerns and  for  foreign  commerce  (see  Coinage  Laws  of 
the  Confederation) ;  but  this  dollar  was  never  repre- 
sented by  any  American  coin.  In  1792  the  Congress 
of  the  United  States  established  a  national  mint,  and 
ordered  "dollars  or  units"  to  be  coined,  to  be  each  of 
the  value  of  "a  Spanish  milled  dollar."  The  coins 
minted  under  this  law  contained  371J  grains  of  pure 
silver.  Thus  the  monetary  unit  of  the  American  States 
was  changed  from  54  pence  sterling  to  51|  pence  ster- 
ling. But  the  ideal  dollar  of  exchange  between  Great 
Britain  and  the  United  States  remained  unchanged  at 


20  HAND-BOOK    OF   FINANCE. 

54  pence  sterling,  and  formed  the  basis  for  the  calcula- 
tion of  sterling  exchange  in  the  United  States  until 
such  calculations  were  forbidden  by  the  law  of  March 
3,  1873  (see  Coinage  Laws). 

There  are  240  pence  in  a  pound  sterling,  and  to  make 
it  the  equivalent  of  $4.44  4-9  (the  old  method  of  esti- 
mating the  value  of  a  pound  in  dollars)  the  dollar  must 
contain  54  pence.  But  the  American  monetary  unit  — 
the  silver  dollar  of  the  value  of  a  "  Spanish  milled 
dollar" — was  worth  only  51f  pence  sterling,  and  was 
thus  4^-  per  cent  below  the  standard  of  the  ideal  dollar 
of  exchange ;  hence  in  all  payments  it  was  necessary  to 
add  4^  per  cent  nominal  premium.  This  continued 
until  1837,  when  the  bullion  value  of  all  American  gold 
coins  was  reduced.  The  eagle,  which  under  the  law  of 
1792  was  to  contain  247-J  grains  of  pure  gold,  was  re- 
duced in  value  so  as  to  contain  only  232.200  grains  of 
pure  gold.     (See  Digest  of  Coinage  Laws.) 

But,  while  the  monetary  unit  of  the  United  States 
continued  to  be  the  silver  dollar,  both  gold  and  silver 
coins  were  a  legal  tender,  and  the  gold  dollar  being 
reduced  in  bullion  value  below  the  silver  dollar,  all 
debtors  exercised  their  legal  option  of  paying  in  gold 
instead  of  silver  dollars.  The  bullion  value  of  silver 
coins  being  greater  than  their  legal  tender  value,  as 
compared  with  the  gold  coins,  the  former  passed  out  of 
circulation  and  were  exported,  leaving  the  gold  coins  as 
the  principal  part  of  the  metallic  currency  in  the  LTnited 
States.  This  was  found  so  great  an  inconvenience  that 
by  the  law  of  February  21,  1853,  the  silver  fractional 
coins  (but  not  the  silver  dollar)  were  reduced  in  weight, 
and  though  they  were  declared  to  be  legal  tender  for  no 
more  than  five  dollars,  their  legal  tender  value  was  so 


THE   DOLLAR  AND   OTHER   UNITS.  21 

much  greater  than  their  bullion  value  that  they  re- 
mained in  the  country  until  the  issue  of  legal  tender 
paper  money  in  1862. 

The  change  from  an  almost  exclusive  silver  metallic 
currency  to  one  of  gold  in  1837  was  not,  as  is  frequently 
supposed,  the  result  of  a  demonetization  of  silver,  but 
only  of  the  exercise  of  the  legal  option  of  all  debtors 
to  pay  debts  in  the  cheapest  one  of  two  legal  tender 
metals.  A  similar  change  (except  that  it  was  from  gold 
to  silver)  took  place  in  France  in  1785.* 

In  1857-8  a  somewhat  similar  change  was  made  in 
Austria.  By  an  imperial  decree  the  value  of  the  mon- 
etary unit,  the  silver  florin,  was  reduced  from  48|  cents 
in  American  silver  dollars  to  45^.  Silver  was  estab- 
lished as  the  only  legal  metallic  currency  of  the  em- 
pire, though  gold  was  also  to  be  coined  for  commercial 
purposes. 

But  the  American  gold  dollars  measured  by  the  silver 
dollar  of  exchange  (54  pence)  were  9-J  per  cent  below 
par.  Hence  in  foreign  payments  it  was  customary  to 
add  9^  per  cent  nominal  premium  to  the  <£4.44  4_9?  which 
was  presumed  to  be  the  equivalent  of  a  pound  sterling. 

Seeing  that  none  of  our  own  coins  nor  those  of  other 
nations  now  in  circulation  agree  with  this  standard  of 
4s.  6d.,  the  query  naturally  arises  as  to  how  it  came  to 
be  adopted.  A  complete  answer  to  this  requires  a 
glance  into  history. 

*  In  France  a  different  valuation  of  the  metals  has  had  a  different  effect.  Pre- 
viously to  the  recoinage  in  1785  the  lottis  (Vor  was  rated  in  the  mint  proportion 
at  only  24  livres,  when  it  was  really  worth  25  livres  10  sols.  Those,  therefore, 
who  should  have  discharged  the  obligations  they  had  contracted  by  payment  of 
gold  coin  instead  of  silver,  would  plainly  have  lost  1  livre  10  sols  on  every  sum 
of  24  livres.  In  consequence,  very  few  such  payments  were  made;  gold  was 
almost  entirely  banished  from  circulation,  and  silver  became  almost  the  only 
species  of  metallic  money  used  in  France. —  Say,  Trait  i  <V Economie  Politique, 
torn,  i,  p.  393. 


22  HAND-BOOK    OF   FINANCE. 

In  a  remote  little  valley  in  Bohemia  in  1518,  the 
Count  of  Schlick  began  to  coin  silver  pieces  of  an  ounce 
weight.  These  were  not  only  of  uniform  weight  and 
fineness,  but  they  soon  became  very  numerous.  The 
traders  of  the  time  were  in  want  of  some  international 
standard,  fixed  at  least  by  common  honesty  as  a  measure 
of  the  value  of  other  coins  ;  and  these  coins  soon  became 
in  good  repute  all  over  Europe  under  the  names  of 
Schlickten  thalers  or  Joachim's  thalers  —  the  first  from 
the  name  of  the  Count  of  Schlick,  and  the  second  from 
Joachims-thal  or  Joachim's  valley,  where  they  were 
coined.  These  names  soon  became  synonyms  for  hon- 
est coins  of  full  weight  and  value,  but  after  a  time  the 
name  was  abbreviated,  and  the  word  thaler  (literally,  in 
this  connection,  "  valley er  ")  was  combined  with  other 
words  to  designate  the  established  coins  of  various  na- 
tions, which,  though  not  of  the  same  weight  and  fine- 
ness as  the  Schlickten  thalers,  were  of  uniform  weight 
and  fineness.  Thus  originated  the  German  thaler,  the 
Low  German  dahler,  the  Danish  and  Swedish  dalers, 
the  Italian  tollero,  and  the  more  widely  known  dollar. 

When  the  idea  of  a  characteristic  name  for  honest 
coins  crept  over  into  Britain  it  found  a  word  there 
already  coined  for  its  adoption,  viz. :  the  word  "dollar," 
from  the  Gaelic  dol,  a  valley,  and  ard,  a  hill,  signify- 
ing in  a  valley  shut  in  by  hills,  and  there  is  yet  in  Scot- 
land, near  Clackmanan,  a  little  valley  parish  and  a  vil- 
lage called  Dollar. 

Although  there  were  no  coins  minted  in  England 
called  dollars,  there  were  many  foreign  coins  of  differ- 
ent values,  from  the  various  national  mints  of  Europe, 
circulating  there  under  the  common  name  of  dollars. 
Shakspeare  uses  the  word  twice  (once  in  Measure  for 


THE    DOLLAR   AND    OTHER    UNITS.  23 

Measure  and  once  in  Macbeth),  and  there  is  plenty  of 
evidence  that  the  term  "  dollars,"  as  applied  to  coins, 
was  in  common  use  there  previous  to  1600.  Some 
common  measure  or  standard  for  these  dollars  was 
necessary  as  a  matter  of  convenience,  and  Spain  being 
then  the  leading  country  of  Europe,  her  piasters  of  eight 
reals  —  called  also  "  pieces  of  eight "  —  being  in  more 
general  use  than  any  other  foreign  coins,  were  adopted 
as  the  standard  dollar.  But  previous  to  this,  in  1519, 
when  Charles  V,  king  of  Spain,  became  also  em- 
peror of  Germany,  he  had  adopted  a  new  coat  of 
imperial  arms,  in  which  those  of  Spain  were  quartered 
with  those  of  the  empire,  and  had  stamped  this  new 
device  on  the  coinage  of  Spain,  the  pillars  in  the  device 
giving  rise  to  the  name  of  "  pillar  dollars  "  —  this  par- 
ticular coin  being  then  known  in  Spain  as  colonato. 
These  dollars  were  from  the  mint  of  Seville,  and  in  the 
table  of  "  silver  coins  of  the  world,"  made  by  Sir  Isaac 
Newton  when  assay er  to  the  British  mint,  are  set  down 
at  the  exact  value  of  54  pence.  This  and  the  old  French 
ecu,  of  about  the  same  date,  are  the  only  coins  of  that 
exact  value  in  the  whole  table.  Thus  that  which  was 
known  in  England  as  a  dollar,  and  as  our  dollar  of  ex- 
change, is  the  adaptation  of  an  idea  of  German  origin  to 
a  Gaelic  word  and  a  Spanish  coin. 

The  dollar  of  54  pence  is  an  instance  of  that  ideal 
money,  or  money  of  exchange,  which  has  no  existence 
in  fact,  but  is  used  in  calculating  nearly  all  international 
exchanges.*  With  many  nations,  as  with  our  own,  it 
differs  from  the  money  used  in  domestic  accounts,  and 

*  Professor  Sumner,  in  his  History  of  American  Currency  (page  103),  is  mis- 
taken in  raying:  '-It  is  not  known  how  this  ratio  ($4.44.44  to  the  £1)  was  deter- 
mined."   It  is  very  plain  that  it  was  determined  as  I  have  described  above. 


24  HAND-BOOK    OF    FINANCE. 

almost  universally  differs  from  the  coins  in  use.  Coins 
being  national,  and  in  a  great  measure  local,  are  subject 
to  alterations  and  debasements  by  governments;  but 
moneys  of  exchange,  though  rarely  established  by  de- 
sign, become  widely  established  by  the  mutual  consent 
of  nations  for  convenience,  and  are  in  a  measure  beyond 
the  reach  of  legislation.  While  we,  through  English 
custom,  had  taken  our  ideal  dollar  from  the  Spanish 
dollar  of  Charles  Y,  custom  has  established  in  Spain 
itself  a  different  ideal  dollar.  The  "peso  cluro"  or 
"  hard  dollar,"  was  once  a  Spanish  coin  of  eight  reals, 
but  was  afterward  altered  to  a  greater  value  of  ten  reals. 
The  first  coinage  of  the  "hard  dollar,"  however,  had 
been  accepted  by  other  nations  as  the  standard  of  ex- 
change with  Spain,  and  though  the  value  of  the  coin 
was  altered  so  that  eight  hard  dollars  were  worth  ten 
and  five-eighths  dollars  of  exchange,  the  ideal  dollar  re- 
mained unchanged. 

The  ideal  unit  of  values  in  the  United  States  until 
1873  was  a  dollar  of  51f  pence,  and  the  ideal  dollar  of 
exchange  adopted  in  London  was  54  pence.  Our  coin- 
age never  agreed  with  either  of  these  values.  But  in 
1816  a  new  monetary  system  was  adopted  in  Great 
Britain,  and  it  was  enacted  that  gold  coins  only  should 
he  legal  tender  in  all  payments,  and  that  silver  coins 
should  be  legal  tender  for  only  40s.*  The  original 
pound  of  silver  which  previous  to  1816  was  coined  into 
62  shillings  was  then  coined  into  66  shillings,  and  the 


*  From  1664  down  to  1717  the  relation  of  gold  to  silver  was  not  fixed  by 
authority,  and  silver  being  then  the  only  legal  tender,  the  value  of  gold  coins 
fluctuated  according  to  the  fluctuations  in  the  relative  worth  of  the  metals  in 
the  market.  In  1717  the  ancient  practice  was  agaiirf  everted  to.  and  it  was  fixed 
that  tbe  guinea  should  be  taken  as  the  equivalent  of  21  shillings,  and  conversely. 
—McCullocK's  Commercial  Dictionary,  page  352. 


THE   DOLLAR   AND   OTHER   UNITS.  25 

sovereign  was  declared  to  be  a  pound.  Thus  the  mon- 
etary unit  of  Great  Britain  agrees  with  its  principal  coin. 

By  the  coinage  law  of  February  12,  1873,  the  mone- 
tary unit  of  the  United  States  was  changed  from  a  silver 
dollar  of  412-J  grains  standard  (371J  grains  pure)  silver 
to  a  gold  dollar  of  25  8-10  grains  standard  gold,  and  the 
legal  tender  function  of  all  silver  coins  was  reduced  to 
five  dollars.  But  as  far  as  the  half  dollars,  quarters  and 
dimes  were  concerned,  this  was  only  a  reiteration  of  the 
law  of  February  21, 1853.  By  the  law  of  July  13, 1876, 
the  trade  dollar  was  declared  not  to  be  a  legal  tender 
at  all. 

As  shown  in  the  preceding  pages,  the  only  "dollar" 
known  in  British  finance  was  the  dollar  of  54  pence. 
This  was  distinctly  defined  by  a  proclamation  of  Queen 
Anne  in  1704,  to  the  effect  that  the  Spanish  and  Mexi- 
can "pieces  of  eight,"  or  dollars,  were  of  the  value  of 
4s.  6d.  When,  after  1860,  the  bonds  of  the  United 
States  payable  in  "  dollars  "  were  put  upon  the  London 
market,  though  issued  by  a  government  whose  nominal 
unit  of  values  was  a  dollar  of  51f  pence,  English 
brokers  and  bankers,  still  adhering  to  their  old  estab- 
lished idea  of  a  dollar  as  the  equivalent  of  54  pence 
sterling,  quoted  the  market  prices  of  Unites  States 
bonds  in  dollars  of  54  pence.  Thus  when  the  bonds 
were  really  at  par  they  were  quoted  in  London  at  91.33, 
this  being  the  equivalent  of  a  dollar  of  American  gold 
expressed  in  the  old  dollar  of  54  pence  sterling.  This 
custom  was  maintained  in  London  until  December  30, 
1873,  when  a  new  "dollar"  oifour  shillings  having  been 
adopted  by  the  London  Stock  Exchange,  United  States 
bonds  were,  and  are  yet,  quoted  in  that  ideal  standard. 
This  new  dollar  is  not  represented  by  any  coin  of  any 
2 


26  HAND-BOOK   OF   FINANCE. 

nation,  and  is  the  equivalent  of  96  cents  and  96  hun- 
dredths of  a  cent  in  American  gold.  It  will  thus  be 
seen  that  while  the  old  London  quotations  made  United 
States  bonds  appear  to  be  nearly  8  per  cent  lower  than 
the}'  were  in  fact,  the  new  Stock  Exchange  dollar  makes 
them  appear  to  be  about  3  per  cent  higher  (in  London) 
than  they  are  in  fact.  By  this  rule  of  the  London 
Stock  Exchange,  and  by  the  United  States  law  in  regard 
to  the  computations  of  sterling  exchange,  the  old  "  dol- 
lar" of  54  pence  appears  to  have  passed  entirely  out  of 
use  as  an  ideal  standard.  This  dollar,  however,  should 
not  be  confused  with  the  American  silver  dollar  estab- 
lished as  the  unit  of  values  by  the  law  of  1792,  and 
which  remained  as  such  until  abrogated  by  the  law  of 
February  12,  1873. 

In  Frankfort  the  quotations  of  the  market  prices  of 
United  States  bonds  are  made  in  still  another  assumed 
"dollar,"  which  is  the  equivalent  of  4J  marks.  The 
gold  mark  being  equivalent  to  23  8-10  cents  in  Ameri- 
can gold,  makes  the  Frankfort  stock  exchange  dollar, 
used  for  quoting  United  States  bonds,  equal  to  $103.05 
in  American  gold.  The  Frankfort  quotations,  there- 
fore, for  United  States  bonds  make  them  appear  to  be 
nearly  3  per  cent  lower  than  they  would  quoted  in 
American  gold  dollars. 

Still  another  fact  complicates  the  foreign  quotations 
for  American  bonds,  viz.:  In  London  the  bonds  are 
quoted  "flat";  that  is,  including  accrued  interest  to  the 
date  of  quotation ;  while  in  Frankfort  they  are  quoted 
exclusive  of  interest.* 

*  The  following  practical  illustration  of  the  various  methods  of  quoting 
United  States  bonds  in  European  markets  is  furnished  by  a  banker  for  this 
publication: 

"  London  assumes  in  the  calculation  of  American  bonds  the  gold  dollar  at  4 


PAPER  MONEY  AND  COIN  IN  THE  UNITED  STATES. 


THEKE  has  been  no  politico-economical  question  so 
much  discussed  in  the  United  States  during  the  last 
ten  years  as  the  amount  of  the  outstanding  volume  of 
currency,  and  none  which  has  been  so  much  misrepre- 
sented. The  public  mind  having  been  concentrated 
upon  the  "  currency  question,"  the  opposing  political 
parties  have  continually  ascribed  all  changes  and  crises 
in  commercial  and  industrial  affairs  to  changes  in  the 
volume  of  the  currency  of  the  United  States.  They 
have  started  out  in  all  cases  with  the  erroneous  assump- 
tion that  the  foundation  of  all  the  prosperity,  or  the 
cause  of  all  the  depression  —  as  the  case  may  have  been 
—  experienced  in  the  last  ten  years,  was  to  be  found  in 

shillings  including  coupon.  If,  therefore,  say,  on  the  28th  of  August  anew  5  per 
cent  hond  is  quoted  in  London  107  (while  demand  sterling  in  New  York  is  4.89) 
a  $100  bond  will  cost: 

107X4  shillings  =  £21  8s.  @  489 $104.65  gold. 

"  Frankfort  assumes  in  the  calculation  of  American  bonds  the  gold  dollar  at 
4*4  marks  exclusive  of  coupon.  The  above  bond  quoted  in  Frankfort  August 
28  at  103^  (while  demand  exchange  on  Germany  in  New  York  is  95*4  cents  gold 
per  4  mark)  will  cost: 

103KX4&  =  mark  438.81  @  95^ $104.49  gold. 

Accrued  interest,  August  1  to  28 41 

$104.90  gold. 
"On  the  same  day  new  fives  were  quoted  in  New  York  116*4.  Gold  being 
then  111,  made  the  bond  worth  $104.95  gold.  This  comparison,  based  on  actual 
market  reports,  will  show  the  quotations  of  103&  in  Frankfort,  107  in  London, 
and  116X  in  New  York  to  stand  very  near  to  each  other.  It  may  be  added  that 
Paris  assumes  the  gold  dollar  at  5  francs  including  coupon,  while  Amsterdam 
assumes  it  at  2*4  guilders  excluding  coupon.  Berlin  and  the  other  German 
places  figure  exactly  the  same  as  Frankfort." 


28  HAND-BOOK   OF   FINANCE. 

either  the  contraction  or  the  inflation  of  the  paper  cur- 
rency of  the  United  States.  In  accordance  with  this 
narrow  view  of  finance  the  partisans  of  one  party  or 
another  have  been  continually  printing  in  pamphlets 
and  newspapers  tables  and  estimates  of  the  volume  of 
currency  in  existence  at  one  time  as  compared  with 
another.  The  fault  with  all  these  estimates  and  tabu- 
lations has  been  that  they  have  been  made  to  sustain  a 
preconceived  theory  of  the  causes  of  the  changes  in  the 
financial  situation  at  various  times.  The  facts  have  in 
all  cases  been  made  secondary  to  the  theories,  and  con- 
sequently only  such  facts  as  sustained  the  theories  have 
been  given,  while  all  others  —  which  in  many  cases,  if 
fairly  stated,  would  have  completely  upset  the  theories 
—  have  been  omitted. 

A  great  majority  of  the  misstatements  of  the  volume 
of  currency  in  circulation  have  probably  not  been  inten- 
tional ;  they  are  due  simply  to  that  proneness  of  all  men 
to  rest  satisfied  when  they  have  found  certain  facts  to 
sustain  their  preconceived  notions.  Indeed,  the  be- 
lievers in  theories  founded  upon  a  few  indisputable 
facts,  but  ignoring  others  of  equal  importance,  are 
always  most  thoroughly  convinced  of  the  truth  of  their 
own  doctrines.  Out  of  just  such  half-truths  have  arisen 
all  the  great  errors  of  mankind  on  any  subject.  It  is 
an  error  to  presume  that  the  apparent  prosperity  —  the 
"flush  times"  experienced  in  this  country  from  1867  to 
1872 — were  due  entirely,  or  even  very  largely,  to  a 
greater  volume  of  currency  then  than  now.  A  broader 
view  of  finance  would  show  that  the  progress  of  finan- 
cial affairs  in  the  United  States  has  been  in  accordance 
with  the  general  situation  throughout  the  commercial 
world,  and  as  this  little  book  is  intended  as  a  handbook 


PAPER   MONEY   AND   COIN   IN  THE  U.   S.  29 

of  financial  facts  rather  than  of  theories,  the  following 
table  of  the  various  kinds  of  paper  currency  in  existence 
in  the  United  States  each  year  since  1853  has  been  com- 
piled, in  order,  if  possible,  to  remove  the  question  of  the 
exact  amount  of  currency  in  circulation  each  year  from 
the  confusion  to  which  it  has  heretofore  been  subject. 

The  propriety  of  including  the  7  3-10  per  cent  notes, 
the  compound  interest  notes,  the  3  per  cent  certificates, 
and  the  various  other  forms  of  unfunded  debt  of  the 
government  among  the  forms  of  currency,  will  doubt- 
less be  questioned  by  some ;  but  it  is  well  known  that 
all  these  did  circulate  to  a  large  extent  as  money,  though 
not  so  rapidly  as  the  non-interest-bearing  treasury  notes. 
Reference  to  the  law  authorizing  the  7  3-10  per  cent 
notes  will  also  show  that  they  were  intended  to  circulate 
as  money ;  the  Secretary  was  authorized  to  issue  them 
as  legal  tender  to  all  creditors  for  the  amount  of  the 
principal,  together  with  the  interest  accrued  on  any 
such  note  at  the  date  of  tender.*  A  large  proportion 
of  the  $672,578,850  of  7.30  notes,  and  the  $159,012,140 
of  compound  interest  notes,  outstanding  on  July  1, 
1865,  were  issued  under  authority  of  the  law  of  June 
30,  1864,  which  made  them  a  legal  tender  for  the  face 
value  of  the  notes  and  the  accrued  interest.  The  3  per 
cent  certificates,  also  authorized  by  the  act  of  March  2, 
1867,  were  intended  as  a  substitute  for  $50,000,000  of 
United  States  notes,  which  were  by  that  means  released 
from  the  vaults  of  the  national  banks,  where  they  had 
been  held  according  to  law  as  a  reserve  against  circula- 
tion and  deposits.  These  certificates  were  therefore 
practically  an  addition  of  $50,000,000  to  the  currency 
in  1867. 

*  See  Digest  of  Laws,  Act  of  June  30, 1864,  and  March  3, 1865. 


30  HAND-BOOK   OF   FINANCE. 

While  there  may  be  some  reasonable  question  as  to 
the  propriety  of  regarding  the  7.30  notes  and  the  com- 
pound interest  notes  as  an  addition  to  the  volume  of 
currency  to  the  full  amount  of  their  issue,  there  can  be 
no  doubt  that  a  just  estimate  of  the  volume  of  currency 
in  use  each  year  must  take  them  into  the  account  at 
some  ratio  of  the  total  amount  outstanding,  even  if  it 
be  not  more  than  two-thirds  their  face  value.  As  to  the 
3  per  cent  certificates,  there  can  be  no  question  that 
they  were  an  addition  to  the  volume  of  currency  to  the 
full  amount  of  their  issue.  They  were  unlike  the  pres- 
ent non-interest-bearing  certificates  issued  to  the  banks, 
because  no  special  reserve  of  United  States  notes  was 
held  in  the  treasury  for  their  redemption,  whereas  the 
United  States  notes  received  for  the  present  certificates 
are  held  as  a  special  deposit  in  the  treasury,  and  are  not 
used  for  any  other  purpose  than  the  redemption  of  the 
certificates.* 

Even  if  the  practical  effect  of  the  7.30  and  compound 
interest  notes  to  increase  the  volume  of  paper  money 
be  estimated  at  no  more  than  one-half  their  nominal 
value,  and  if  the  total  volume  of  bank  notes  and  un- 
funded debt  circulating  as  money  in  1866  be  estimated 
as  equivalent  to  no  more  than  $1,300,000,000,  thus 
making  a  deduction  of  $500,000,000  for  the  amount  of 
such  notes  that  would  not  circulate  to  any  considerable 
extent  as  money  —  even  with  this  deduction,  it  will  be 
seen  that  the  period  of  greatest  contraction  in  the  paper 
money  circulation  of  the  United  States  was  from  1866 
to  1869. 

But  there  is  still  another  and  even  more  important 
point  to  be  considered  in  connection  with  the  contrac- 

*  See  Act  June  8,  1872. 


PAPER   MONEY   AND    COIN   IN   THE   U.   S.  31 

tion  from  1866  to  1869.  The  war  of  the  rebellion  closed 
in  1865.  Previous  to  that  time  there  were  twelve  of 
the  Southern  States,  viz. :  Alabama,  Arkansas,  Florida, 
Georgia,  Louisiana,  Mississippi,  North  Carolina,  South 
Carolina,  Tennessee,  Texas,  Virginia  and  West  Vir- 
ginia, from  which  national  bank  notes  and  United  States 
notes  of  any  sort  were  practically  excluded.  These 
twelve  States  had  a  population  in  1870  of  9,999,401. 
In  the  immediate  vicinity  of  the  armies  of  the  United 
States  in  the  border  States,  such  as  Tennessee  and  Vir- 
ginia, there  would  of  course  be  a  large  circulation  of 
United  States  notes,  but  with  the  great  bulk  of  the 
nearly  10,000,000  of  population  in  these  twelve  South- 
ern States  United  States  notes  and  national  bank  notes 
were  almost  unknown  until  the  close  of  the  war.  Until 
1866  therefore,  the  entire  amount  of  paper  money  in- 
cluded in  the  table  was  practically  confined  in  its  circu- 
lation to  the  population  of  the  Northern  and  Atlantic 
States,  a  population  which,  from  1865  to  1866,  probably 
did  not  exceed  23,000,000  to  24,000,000,  and  was  only 
27,000,000  in  1870.  It  was  not  until  1867  that  the 
rehabilitation  of  the  South  began  to  draw  much  capital 
from  the  Northern  States,  and  the  amount  of  currency 
in  the  Southern  States  even  in  that  year  could  not 
have  been  over  one  third  as  much  per  capita  as  in  the 
Northern  States.  It  is  fair  to  presume,  however,  that 
by  1869  or  1870  the  greatest  effect  of  the  new  require- 
ments of  the  people  of  the  Southern  States  for  currency 
had  been  experienced,  and  that  from  8,000,000  to  10,- 
000,000  more  people  were  using  United  States  and  na- 
tional bank  notes  as  their  only  currency  than  in  1865-6. 
These  facts  will  show  the  unreliability  of  any  of  the 
usual  estimates  of  the  amount  of  currency  per  capita  in 


32  HAND-BOOK   OF   FINANCE. 

the  United  States  based  upon  the  entire  population. 
There  are  so  many  elements  to  be  considered  that  it  is 
doubtful  if  any  estimate  of  the  amount  of  currency  per 
capita  of  the  population  using  it  can  be  made  that  will 
not  be  open  to  criticism. 

The  table  given  on  another  page  shows,  however, 
conclusively  that  the  period  of  greatest  contraction  of 
the  paper  money  of  the  United  States  per  capita  of  the 
population  using  it  was  from  1866  to  1869-70.  It  is 
therefore  to  be  presumed  that  if  the  amount  of  paper 
money  per  capita  of  the  population  had  been  the  con- 
trolling element  in  the  stimulation  or  the  depression  of 
industry,  improvements  and  trade,  as  is  popularly  be- 
lieved, the  most  positive  evidences  of  such  depression 
from  a  scarcity  of  the  currency  per  capita  of  the  popu- 
lation would  have  been  experienced  from  1866  to  1870. 
But  it  is  well  known  that  this  was  popularly  regarded  as 
a  period  of  unexampled  prosperity  in  the  United  States. 
The  increase  of  railroad  mileage  was  greater  each  year 
during  the  whole  period ;  beginning  with  an  increase  in 
1866  of  about  3  per  cent  on  the  mileage  of  1865,  the  ratio 
of  increase  was  greater  each  year  afterward  until,  in  1871, 
it  was  over  12  per  cent  on  the  mileage  of  1870 ;  prices 
(in  currency)  of  nearly  all  commodities  advanced  largely 
during  the  first  half  of  the  period  and  were  maintained 
during  the  latter  half,  notwithstanding  a  decline  in  the 
average  annual  price  of  gold  from  140  in  1866  to  123  in 
1870.  Values  of  real  estate  also,  throughout  the  coun- 
try, increased  during  the  whole  of  the  period  in  ques- 
tion. It  is  therefore  plain  that  whatever  would  other- 
wise have  been  the  effect  of  the  great  contraction  of  the 
currency  from  1866  to  1870,  it  was  neutralized  and 
overcome   by   some   more   general   and    potent   cause, 


PAPER   MONEY   AND   COIN   IN   THE   U.   S.  33 

which,  it  seems  to  the  writer,  is  to  be  found  in  the  in- 
creased production  of  gold  and  silver  at  the  beginning 
of  the  period  in  question,  and  the  effects  of  the  three 
great  wars  of  the  preceding  six  years.  Not  only  does 
the  increased  production  of  the  precious  metals  at  that 
period  afford  some  explanation  of  the  universal  stimulus 
given  to  trade,  enterprise  and  speculation  from  1867  to 
1872,  but  the  decrease  in  the  production  of  the  same 
metals  affords  the  clue  to  the  causes  which  resulted  in 
the  crisis  of  1873. 

The  following  table  gives  the  amount  of  each  kind 
of  treasury  paper,  as  well  as  the  amount  of  bank  notes, 
in  circulation  each  year,  and  also  the  aggregate  of  both 
each  year,  from  1854  to  1876  : 


NOTES  TO  TABLE  ON  FOLLOWING  PAGE. 

*  The  amounts  given  for  the  hank  note  circulation  in  the  United  States  ahout 
the  1st  of  January  each  year  for  the  years  1854-55-56-57-58  are  taken  from  a 
report  of  the  Secretary  of  the  Treasury,  and  were  published  in  a  tabulated  form 
in  HunVs  Commercial  Magazine  for  March,  1857. 

t  The  circulation  of  the  State  banks  in  1863  was  given  in  the  report  of  the 
Comptroller  of  the  Currency  for  1873,  and  the  above  amount  was  obtained  for 
that  publication  from  page  210  of  the  report  of  the  Secretary  of  the  Treasury  on 
the  condition  of  the  banks  at  the  commencement  of  the  year  1863.  The  returns 
from  Delaware,  Maryland,  Louisiana,  Tennessee  and  Kentucky  were  not  com- 
plete. The  aggregate  amount  of  State  bank  circulation  reported  at  that  time 
was  much  greater  than  at  any  previous  period. 

X  The  $45,449,155  of  State  bank  circulation  given  for  January  1,  1866,  is 
the  amount  of  State  bank  notes  reported  by  the  national  banks,  which  at  that 
time  had  recently  been  reorganized  as  such  from  State  banks.  But  as  there 
were  still  other  State  banks  in  existence,  it  is  probable  that  the  $45,449,155  was 
considerably  below  the  aggregate  of  State  bank  notes  in  existence  at  that  date 


34 


HAtfD-BOOK   OF   FINANCE. 


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PAPER   MONEY   AND   COIN   IN  THE   U.   S. 


35 


COIN  IN   THE  UNITED   STATES. 


Estimate  of  the  amount  of  coin  in  the  country  from 
1854  to  1876: 


Coin  in  Banks. 

Total  in  the 
Country, 

1854 

$59,410,000 
55,945,000 
59,714,000 
59,272,000 
60,705,000 

$240,000,000 

1855 

1856 

1857 

1858 

1859 

275,000,000 

1860 

1861 

1862 

1863 

1864 

1865 

1866 

1869 

1870  (October) 

6,000,000 
6,000,000 
5,000,000 
5,000,000 
5,500,000 
5,000,000 
6,000,000 

121,000,000 

116  000  000 

1871  (October) 

1872  (October) 

102,000,000 
109  000  000 

1873  (October) 

1874  (October) 

110  000  000 

1875  (October) 

o  o 

'§8 

o  o 
©© 

1876  (June)  

The  estimates  of  the  amounts  of  specie  in  circulation 
in  the  whole  country  at  any  period  must  of  course 
always  be  open  to  criticism,  for  the  reason  that  no  exact 
statistics  are  possible.  For  the  period  from  1854  to 
1859  the  only  trustworthy  figures  are  those  given  in  the 
annual  reports  of  the  Secretary  of  the  Treasury,  show- 
ing the  amount  of  coin  held  by  the  banks  on  or  about 
the  1st  of  January  each  year.  These  have  been  used  as 
a  basis  of  approximation  to  the  whole  amount  in  the 
country  for  that  period. 

For  the  period  from  1870  to  1876  the  data  are  more 
definite.     There  are  only  three  items  worthy  of  con- 


36  HA^D-BOOK    OF   FINANCE. 

sideration  in  the  estimation  of  the  amount  for  each 
year,  viz.:  the  amount  in  the  national  treasury,  the 
amounts  in  the  national  and  commercial  banks  of  the 
entire  country  (including  all  commercial  banks  on  the 
Pacific  coast),  and  the  amount  in  circulation  in  the 
Pacific  States  and  Territories  *  (The  savings  banks 
hold  scarcely  any  coin.) 

The  actual  amount  of  coin  in  the  treasury  of  the 
United  States  each  year,  on  October  1,  was  as  follows, 
viz.:  1869,  $108,800,000;  1870,  $96,000,000;  1871, 
$90,500,000;  1872,  $78,000,000;  1873,  $80,300,000; 
1875,  $67,833,316 ;  1876  (June  3),  $73,625,584. 

According  to  the  report  of  the  Comptroller  of  the 
Currency  for  1875,  the  total  amount  of  nominal  "coin" 
held  by  all  the  national  banks  of  the  United  States  on 
October  8,  1870,  was  $18,460,011.  Of  this  amount 
$13,135,649  was  held  by  banks  in  New  York  city.  But 
of  this  $13,135,649  only  $1,607,742  was  actual  coin,  all 
the  rest  being  United  States  coin  certificates  and  checks 
on  other  banks  payable  in  coin.  Upon  this  basis  the 
amount  of  actual  coin  held  by  all  the  sixteen  hundred 
national  banks  of  the  United  States  in  October,  1870, 
could  not  have  exceeded  $2,200,000  —  this  amount  in- 
cluding all  sorts  of  coin.     Allowing  $1,000,000  more 

*  The  relative  proportions  of  the  banking  business  in  the  United  States, 
transacted  through  the  different  classes  of  banking  institutions,  may  be  esti- 
mated by  the  following  statement  of  the  whole  number  of  banks  of  each  class, 
and  the  aggregate  of  deposits  in  each  in  the  year  1875: 


Class  of  Banks. 

No.  of 
Banks. 

Aggregate 
of  Deposits. 

2.087 

*1,000 

*800 

$743,088,815 

•State  Chartered  Commercial  Banks 

*200,000,000 

•Savings  Banks 

*  1.000,000,000 

^Estimated. 

$1,943,088,815 

PAPER   MONEY   AND    COIN   IN   THE    U.   S.  37 

for  the  amount  held  by  all  other  banks,  not  national 
(exclusive  of  the  Pacihc  coast),  and  we  have  not  to 
exceed  $3,200,000.  Estimating  still  $3,000,000  more 
for  actual  coin  in  the  banks  in  California,  it  would  leave 
a  little  over  $6,000,000  as  the  aggregate  of  all  coin  in 
all  banks  in  the  United  States  and  Territories  in  Octo- 
ber, 1870.  The  amount  of  coin  in  the  treasury  of  the 
United  States  October  1,  1870,  was  $96,000,000.  If  we 
make  the  very  liberal  estimate  of  $20  per  capita  for  the 
971,321  of  the  entire  population  of  California,  Nevada, 
Oregon,  Arizona,  Colorado,  Idaho,  Montana,  New 
Mexico,  Utah,  Washington  and  Wyoming  in  1870,  it 
gives  $18,426,420.  Add  this  to  the  coin  in  the  treasury 
and  in  the  banks,  and  we  have  an  aggregate  of  $120,- 
826,420,  say  $121,000,000,  as  the  entire  stock  of  coin  in 
the  United  States  and  Territories  on  October  1,  1870. 

On  October  3,  1872,  the  amount  of  actual  coin  held 
by  the  national  banks  of  New  York  city  was  only 
$920,767  (see  report  of  comptroller  for  1873,  page  44), 
and  on  the  same  basis  the  total  amount  held  by  all  the 
eighteen  hundred  and  fifty  national  banks  of  the  United 
States  could  not  have  exceeded  $1,200,000,  which  would 
give  a  little  over  $4,000,000  for  all  banks  in  the  United 
States  and  Territories.  The  "specie,"  as  reported  to 
the  comptroller  by  the  national  banks  of  the  United 
States  on  October  1, 1875,  was  classified  as  follows,  viz.: 
actual  coin,  $3,364,569 ;  United  States  coin  certificates, 
$4,485,760;  total,  $8,050,329. 


^?Q 


PAPER  MONEY. 


BANK  NOTES. 

BANK  notes  were  not  at  first,  as  most  people  pre- 
sume, an  invention  to  increase  the  amount  of  money 
in  circulation,  but  grew  out  of  the  necessity  for  some 
standard  by  which  to  regulate  the  value  of  coins. 
During  the  sixteenth  and  seventeenth  centuries,  as 
explained  in  the  first  chapter  of  this  book,  the  debase- 
ments of  the  coins  by  different  monarchs  of  Europe 
were  so  frequent  and  so  great  that  merchants  and 
traders  had  no  safeguards  against  loss  but  continual 
resort  to  the  assayers.  These  sometimes  disagreed,  and 
some  authority  of  wider  jurisdiction  than  the  individual 
assayer  was  required.  Banks  had  already  been  devised  * 
as  a  means  of  assisting  governments  to  secure  the  united 
co-operation  of  the  people  in  the  finances  of  the  states, 
and  in  the  exercise  of  this  function  it  became  necessary 
that  each  of  the  great  banks  should  also  fix  the  values 
of  all  home  and  foreign  coins.  The  universal  rule  for 
this  valuation  was  to  receive  all  coins  at  the  value  of 
the  pure  gold  or  silver  in  them  as  compared  with  an 
ideal  standard,  viz.,  a  specified  number  of  grains  of  gold 
or  silver,  to  be  called  a  "ducat,"  a  "  florin,"  a  "  pound," 
or  a  "dollar."     In  most  cases  this  ideal  coin  at  first 

*Bank  of  Venice,  founded  in  1157;  Bank  of  Barcelona,  in  1349;  Bank  of 
Genoa,  in  1407;  Bank  of  Amsterdam,  in  1609;  Bank  of  Hamburg,  in  1619;  Bank 
of  Sweden,  in  1656;  Bank  of  England,  in  1694. 


PAPER   MONEY.  39 

corresponded  to  the  principal  national  coin  of  the 
country  in  which  the  bank  was  located.  But  as  the 
actual  coins  were  debased  from  time  to  time,  their  value 
fell  below  that  of  the  ideal  coin  accepted  by  the  bank  as 
its  standard,  and,  in  some  cases,  particularly  that  of  the 
Bank  of  Venice,  many  of  the  foreign  coins  were  re- 
ceived at  valuations  higher  than  warranted  by  the  value 
of  pure  gold  or  silver  in  them.  But  these  various  coins 
once  deposited  with  the  bank  the  account  was  turned 
into  "ducats  "  and  the  depositor  credited  with  so  many 
"ducats  "  of  the  ideal  standard  established  by  the  bank. 
The  amount  thus  credited,  or  any  part  of  it,  was  trans- 
ferable on  the  books  of  the  bank,  at  the  option  of  the 
depositor,  to  any  other  person  to  whom  he  might  desire 
to  pay  money ;  but  the  money  could  not  be  withdrawn. 
The  depositor  thus  got  the  benefit  of  a  premium  on 
many  foreign  coins  which  was  not  warranted  by  the 
value  of  the  pure  gold  or  silver  in  them.  But  this  last 
mentioned  inducement  to  deposit  money  in  bank  was 
peculiar  to  the  Bank  of  Venice,  and  was  one  of  the 
secrets  of  its  popularity  and  good  credit  for  so  many 
years.  The  object  was  to  secure  the  coin  for  the  gov- 
ernment, and  the  deposit  was  practically  a  subscription 
to  a  national  loan.  In  the  twelfth  and  thirteenth  cen- 
turies, when  the  common  rate  of  interest  ranged  from 
15  to  25  per  cent  per  annum,  the  loss  on  these  coins, 
received  at  an  overvaluation  by  the  bank,  was  consid- 
ered a  small  rate  to  pay  for  the  use  of  the  money  for 
the  state.  But  aside  from  this  there  was  the  considera- 
tion to  the  depositor  in  other  banks  as  well  as  that  of 
Venice,  that  he  was  at  once  assured  of  the  value  of  the 
coin  he  received.  The  credits  at  the  banks,  instead  of 
being   only  on  the   books  and  transferable  by  order, 


40  HAND-BOOK   OF   FINANCE. 

were  soon  made  in  the  form  of  certificates  of  deposit, 
transferable  by  indorsement;  and  this  suggested  to  a 
Swede  named  Palmstruck,  who  founded  the  Bank  of 
Sweden,  the  idea  of  making  the  certificates  in  uniform 
amounts  and  the  deposit  payable  to  any  holder,  with- 
out indorsement.  This  conception  was  elaborated  into 
the  present  bank  note,  the  first  note  having  been  issued 
by  the  Bank  of  Sweden  in  1658.  "An  enquete  made 
by  the  French  government,  in  1729,  recognizes  the 
priority  of  Sweden  in  this  matter,  and  declares  the 
bank  note  to  be  an  admirable  Swedish  invention,  de- 
signed to  facilitate  commerce."  * 


BANKS  IN  GREAT  BRITAIN  AND  IRELAND. 

The  Bank  of  England,  founded  in  1694,  originated 
in  the  necessities  of  the  government,  then  at  war  with 
France.  "William  Paterson,  a  London  merchant,  con- 
ceived the  scheme  of  organizing  a  bank  to  receive 
deposits  and  assist  the  government  with  money.  The 
capital  of  £1,200,000  was  raised  by  popular  subscrip- 
tion, and  it  was  provided  that  the  whole  of  this  should 
be  permanently  loaned  to  the  government  at  8  per  cent 
per  annum.  The  bank  immediately  issued  notes  of  the 
denomination  of  £50  and  upward.  As  there  was  no 
legal  limit  to  the  amount  of  issue,  they  soon  depreciated, 
and  in  1697  it  was  found  necessary  to  increase  the  capi- 
tal stock  by  £1,000,000.  This  was  paid  into  the  bank, 
and,  for  a  short  time,  was  not  loaned  to  the  govern- 
ment, and  the  effect  was  to  cause  the  notes  and  the 
stock  (which  latter  had  fallen  to  40  per  cent  discount) 

*  Palgrayes'  Notes  on  Banking,  page  87. 


PAPER   MOKEY.  41 

to  appreciate  to  par.  In  1844,  an  act  was  passed  divid- 
ing the  bank  into  two  departments  —  the  issue  and  the 
hanking — the  object  of  which  was  to  prevent  the  issue 
of  notes  without  a  sufficient  reserve  of  specie  to  redeem 
them.  At  the  time  of  the  division  into  the  two  depart- 
ments the  aggregate  of  permanent  loans  made  by  the 
bank  to  the  government  was  £11,015,000.  This  debt 
was  now  declared  to  be  due  from  the  government  to 
the  issue  department,  which  was  authorized  to  issue 
notes  to  circulate  as  money  to  that  amount.  But  some 
of  the  provincial  banks  had  also  been  authorized  to  issue 
notes  to  a  limited  extent  on  the  deposit  of  securities, 
and  it  was  provided  in  the  act  of  1844  that  whenever 
any  of  these  provincial  banks  diminished  their  circula- 
tion permanently,  from  any  cause,  their  right  to  issue 
notes  on  the  deposit  of  government  securities  should 
accrue  to  the  Bank  of  England,  but  that  the  latter  bank 
should  only  issue  two-thirds  as  much  as  the  amount 
which  the  provincial  banks  should  cease  to  issue.  Under 
this  arrangement  the  amount  of  "permanent  issue" 
had  increased  to  £14,475,000  in  1858.  For  the  notes 
issued  under  the  foregoing  provisions  no  reserve  of 
specie  is  required,  but  for  every  other  note  more  than 
are  issued  as  above,  coin  or  bullion  must  be  paid  into 
the  bank  before  the  issue  of  the  note.  There  is  no  dis- 
tinction in  the  appearance  of  the  two  classes  of  issue ; 
but  when  gold  is  wanted  from  the  bank  for  any  pur 
pose,  the  notes  are  presented  at  the  issue  department, 
and,  upon  their  redemption,  are  at  once  destroyed,  and 
for  every  new  deposit  of  bullion  or  coin,  new  notes  are 
issued  to  the  hanking  department. 

Besides  the  Bank  of  England  there  were  in  England, 
in  1872,  116  joint  stock  banks  with  1,007  branches. 


42 


HAND-BOOK    OF    FINANCE. 


In  Scotland  — 

In  1825 there  were  34  banks,  having1  133  branches. 

In  1850 "  18       "  "        382 

In  1859 "  —      "  "        583 

In  1872 "  11      "  "        801 

In  Ireland,  in  1872,  there  were  9  joint  stock  banks 
with  305  branches. 

The  following  shows  the  relative  position,  m  1874,  of 
the  Bank  of  England,  the  London  joint  stock  banks  and 
the  Scotch  joint  stock  banks  :* 


Bank  of  England 

London  joint  stock  bank 
Scotch  joint  stock  banks 


Capital  and 
Surplus. 


£18,300,000 
12,500,000 
14,000.000 


Private 
Deposits. 


£19,630,000 
96,900,000 
77,500,000 


*  In  an  article  by  Mr.  Charles  Moran,  in  the  New  York  Bulletin,  in  Septem- 
ber, 1875,  is  the  following  succinct  statement  of  the  gradual  development  of  the 
Bank  of  England: 

The  capital  of  the  bank  was  increased  — 

In  1709  and  1710  to £5,560,000 

In  1722  to 8,960,000 

In  1742  and  1746  to 10.680,000 

In  1782  to 11,742.400 

In  1816  to 14,553,000 

All  the  above  accessions  of  capital  were  loaned  to  the  government. 

The  following  shows  the  gradual  increase  of  the  business  of  the  bank: 


Circulation. 

Deposits. 

Securities. 

Bullion. 

1793 

£10,865,000 
15,047,000 
24,794,000 
27.249,000 
19,399.000 
17,170,000 
22,450,000 
27,280,000 

£6,443,000 

8,355,000 

13,618,000 

12,696,000 

6,410.000 

6,254.000 

19  666.000 

24,840,000 

£14,810,000 
22,138,000 
40,974.000 
44,854,000 
25,105,000 
22.075,000 
31.908.000 
32,720,000 

£5,322.000 
5,150,000 
3,192,000 
3.409,000 
3,634,000 
4,299,000 

14  557,000 

1800 

1810 

1815 

1825 

1840 

1865 

1875 

22.390,000 

The  circulation,  in  1875,  is  only  equal  to  what  it  was  in  1815.  The  deposits 
are  about  doubled,  while  the  bullion  has  increased  about  seven-fold,  and  yet  the 
securities  held  by  the  bank  in  1875  are  only  £32,720,000,  against  £44,854,000  in 
1815.  These  figures  show  clearly  that  the  Bank  of  England  has  not  kept  pace 
in  its  operations  with  the  vast  increase  of  the  production  and  commerce  of 
Great  Britain  in  the  past  sixty  years. 

But  the  Scotch  banks  are  the  most  successful  institutions  of  the  kind  that 
have  ever  existed.    Until  1845  they  were  almost  entirely  exempt  from  legal 


PAPER   MONEY. 


43 


TABLE   OF   PAPER   MONEY   IN   GREAT   BRITAIN   AND   IRELAND. 

Notes  of  the  Bank  of  England,  the  Bank  of  Ireland, 
and  of  all  joint  stock  and  private  banks  in  circulation  at 
various  periods : 


Date. 

B'k  of  England 
Notes. 

All  other 
Bank  Notes. 

Total  in 
Circulation. 

1854  Dec.  23 

£20,298,000 
20,607,000 
25,162,000 
25,787,168 
27,014,407 
26,250,855 
27,666,229 
26,122,235 
26.929,025 
27,377,405 
29,421,467 
27,427,109 
26.821,875 
28,408,850 

£17,960,307 
17,447,513 
18,225,892 

£38  258  307 

1863  Dec  13 

38,054,513 

43,387,872 

1872  Dec  28 

1873  Dec.  23 

1874  April  1 

1874  June  27 

1874  Oct.    2 

1874  Dec  23 

1875  April  1 

1875  June  25 



1875  Oct.    2 

1875  Dec  23  . . 

1876  Mch  29 

1876  July    5  . . 

FRANCE. 


The  Bank  of  France  was  organized  under  that  name 
in  1803,  but  had  previously  existed  as  the  Royal  Bank. 
It  is  a  government  institution,  the  government  having 
the  appointment  of  the  governor  of  the  Bank  and  two 
of  the  directors.  Its  issues  are  not  limited  by  law. 
There  are,  in  all,  sixty-two  branches  of  the  Bank  of 
France  in  the  various  cities. 

Amount  of  the  notes  of  the  Bank  of  France  in  circu- 
lation at  various  periods  from  1854  to  1876,  expressed 
in  their  equivalent  in  American  gold  dollars : 

restrictions  and  governmental  control.  They  were  limited  neither  as  to  their 
capital,  the  number  and  location  of  the  branches  they  established,  the  number 
of  their  shareholders,  nor  the  amount  of  their  issues  and  discounts.  From  1800 
to  1814,  owing  to  the  scarcity  of  coin,  they  issued  notes  as  low  as  three  shillings 
sterling.  In  1826,  out  of  a  circulation  of  £3.309,000,  £2,079,000  were  notes  under 
£5.    In  1836,  out  of  a  circulation  of  £3,800.000,  two-thirds  were  under  £5. 


44  HAND-BOOK   OF   FINANCE. 

1854 $122,908,040 

1863 157,261,400 

1865 168,000,000 

1870  (January) 297,000,000 

1871  (November) 460,000,000 

1872  (January  31) 490,000,000 

1872  (November  1) 503,982,000 

1873  (January  1). . .  541,890,000 

1873  (February  1) 551,124,000 

1875  (January  28) 528,650,000 

1876  (January  28) 499,600,000 

1876  (June  1) 493,395,000 


GERMANY. 

The  monetary  system  of  the  German  Empire  has 
been  completely  reorganized  in  the  last  few  years,  the 
laws  previously  passed  for  this  purpose  having  gone 
into  effect  January  1,  1876.  The  changes  made  were, 
first,  the  adoption  of  the  exclusive  gold  standard,  with 
the  gold  mark  of  the  value  of  23^  cents  (in  United 
States  money)  as  the  unit  of  values.  Previous  to  this 
the  unit  was  of  silver,  though  both  gold  and  silver 
were  legal  tender,  the  laws  on  these  points  being  sub- 
stantially the  same  as  in  the  United  States  prior  to 
1873. 

The  main  points  in  the  re-organization  of  the  banking 
system  of  the  empire,  and  the  regulation  of  the  issues 
of  paper  money,  the  laws  for  which  went  into  effect 
January  1,  1876,  were  as  follows : 

The  imperial  bank  law  decreed  the  formation  of  the 
"Empire  Bank"  at  Berlin,  with  branches  in  all  other 
important  places  in  the  empire.  Besides  all  the  ordi- 
nary business  of  a  great  commercial  bank,  the  Empire 
Bank  exercises,  according  to  the  imperial  bank  law,  the 
function  of  "  regulating  the  circulation  of  money  in  the 
whole  of  the  German  Empire."     The  Bank  of  Prussia 


PAPER   MO^EY.  45 

was  absorbed  in  the  Empire  Bank,  and  all  the  remaining 
thirty-two  provincial  banks  were  embraced  in  the  regu- 
lations of  the  imperial  bank  law.  The  total  of  thirty- 
three  banks  (including  the  Empire  Bank)  are  authorized 
to  issue  an  aggregate  of  385,000,000  marks  (equal  to 
$91,630,000)  of  what  is  called  "  uncovered  circulation." 
Of  this  385,000,000  marks  of  circulation,  250,000,000 
(equal  to  $59,500,000)  is  apportioned  to  the  Empire 
Bank,  which  may  issue  such  portion  of  them  as  its 
business  requires.  The  remaining  135,000,000  marks  is 
apportioned  to  the  thirty-two  provincial  banks  according 
to  their  capital  and  business.  The  term  "uncovered 
circulation,"  as  currently  used  with  reference  to  the 
above  aggregate  of  circulation  for  the  German  banks, 
is  liable  to  be  misunderstood.  The  Empire  Bank  and 
the  provincial  banks  are  required  to  hold  a  reserve  of 
33J-  per  cent  against  all  the  circulation  they  issue.  This 
33-J-  per  cent  must  be,  according  to  the  text  of  the  im- 
perial bank  law,  either  "  in  German  currency,  in  legal 
tender  notes  of  the  empire,  in  gold  bars,  or  foreign  coins 
valued  at  1,392  marks  for  a  pound  of  gold."  This 
"  uncovered  circulation  "  is,  therefore,  unlike  the  £14,- 
750,000  of  "  permanent  circulation  "  which  the  Bank  of 
England  may  issue  without  any  legal  reserve.  But  the 
385,000,000  marks  is  not  the  final  limit  of  the  volume 
of  paper  money  in  Germany.  It  is  provided  in  the 
imperial  bank  law  that  "  banks  whose  note  circulation 
exceeds  their  33^  per  cent  reserve  and  the  respective 
amounts  assigned  to  them  (as  their  portion  of  the  385,- 
000,000  marks)  shall  pay  yearly  to  the  Exchequer  on 
the  excess  a  tax  of  5  per  cent,  dating  from  the  1st  of 
January,  1876.  It  will  be  seen,  therefore,  that  the  pro- 
vincial banks  have  the  privilege  of  issuing  in  excess  of 


46 


HAKD-BOOK   OF   FINANCE. 


their  prescribed  amount,  and  in  excess  of  their  reserves, 
by  the  payment  of  5  per  cent  tax  on  the  excess.  The 
Empire  Bank  and  its  branches,  and  the  provincial  banks 
and  their  branches,  are  required  to  accept  at  par  all 
German  bank  notes,  but  the  notes  so  accepted  "  can  only 
be  used  either  in  presentation  for  redemption  by  the 
bank  that  issued  them,  or  as  payments  in  the  town 
where  the  bank  which  has  issued  them  has  its  seat." 
In  addition  to  the  bank  notes,  as  above  authorized,  the 
state  issues  120,000,000  marks  ($28,500,000)  of  legal 
tender  notes  of  the  empire. 

Amount  of  bank  notes  and  government  notes  circu- 
lating in  Germany  at  various  periods  from  1850  to  1876 
expressed  in  their  equivalents  in  American  gold. 


1850 

1866 

1870 

1872 

1873  (Feb.  1) 
1876  (Jan.  1) 
1876  (June  3) 


Notes  of  Bank 
of  Prussia. 


$15,120,000 
38,400,000 
102,398,400 
174,414,240 
210,000.000 


Imperial  Bank 
of  Germany. 


All  other  Bank 
and  Govt,  notes 


164,295,000 
166,575,000 


$65,000,000 
79,876,182 

36,000,666 


Total  Circula- 
tion. 


$80,120,000 

182,274,582 

266,600,666 


AUSTRIA. 


Amount  of  government  notes  and  notes  of  the  Na- 
tional Bank  of  Austria  in  circulation  each  year  from 
1852  to  1875,  stated  in  florins,  and  their  total  approxi- 
mate nominal  equivalent  in  United  States  coin : 


PAPER   MONEY 


47 


Year. 


1852 

1853 

1854 

1855 

1856 

1857 

1858 

1859 

1860 

1861 

1862 

1863 

1864 

1865 

1866 

1867 

1868 

1869 

1870 

1871 

1872 

1873 

1874 

1875  (Sept.) 


Government 
Notes, 
Florins. 


164,900,000 
148,300,000 


150,000,000 


112,900,000 
109,800,000 
102,000,000 
97,800,000 
325,500,000 
425,200,000 
424,300,000 
311,100,000 
373,600,000 
370,000,000 
344,000,000 


340,000,000 


Bank  Notes, 
FloriDB. 


192,600,000 
188,300,000 
383,500,000 
377,900,000 
380,200,000 
383,500,000 
385,000,000 
466,000,000 

475,200,666 

396,600,666 
375,800,000 
343,500,000 


300,300,000 

318,300,666 
352,100,000 
293,200,000 
302,100,000 
302,000,000 


Total  Equiva- 
lent in  United 
States  Money. 


$165,000,000 
151,500,000 


241,000,000 


228,000,000 
215,000,000 
198,500,000 


275,000,000 

310,6b6,666 
313,000,000 


288,900,000 


RUSSIA. 


Paper  money  in  Russia  is  furnished  almost  exclusively 
by  the  government,  and  consists  of  treasury  notes  issued 
to  the  Bank  of  the  Empire,  for  the  debt  of  the  govern- 
ment to  that  institution.  The  expenditures  of  the  gov- 
ernment have  constantly  exceeded  the  revenue  since 
1832.  The  aggregate  debt  thus  accumulated  amounted 
in  1869  to  1,375,385,000  roubles  (a  rouble  is  equal  to 
73-^j-  cents  in  United  States  money),  and  in  1873  to 
2,277,081,364  roubles. 


48 


HAND-BOOK    OF   FINANCE. 


Specie  payments  have  been  suspended  in  Kussia  for 
nearly  seventy  years.  There  is  no  gold  in  circulation, 
and  very  little  silver  or  other  coin. 

The  following  figures,  compiled  from  an  article  in 
the  Banker*?  Magazine,  will  show  the  progress  of  paper 
money  circulation  in  Kussia : 

RUSSIAN   PAPER  MONEY   AND   COIN   IN   CIRCULATION. 


Silver  and 
Paper  Money  :  Copper  Coins 
(roubles).  (roubles, 

estimated). 


1788 100,000,000 

1810 !  577,000,000 

1817 836,000,000 

1830 639.000,000 

1858 755,297,000 

1870  (January  1) 721,788,189 

1873  (Januar^  1) 797,313.480 

1875 763,869,467 


100,000.000 
100,000,000 


There  is  much  confusion  and  error  in  the  statements 
in  cyclopedias  and  text-books  in  regard  to  the  debt  of 
Russia,  and  the  proportion  of  it  used  as  circulating 
money.  The  following  will,  however,  explain  some  of 
the  discrepancies  in  the  statements  as  published  in  the 
various  books. 

The  total  debt  of  Eussia  on  January  1, 1871,  amounted 
in  United  States  money  to  $1,241,750,000.  This  in- 
cluded about  $575,000,000  (750,000,000  roubles)  of 
paper  money,  or  bills  of  credit  issued  by  the  govern- 
ment on  the  guarantee  of  all  the  banks  and  other  credit 
establishments  of  the  empire.  These  are  called  notes 
of  the  Bank  of  Russia,  but  are  issued  by  the  Imperial 
Treasury. 

January  1,  1873,  the  total  debt  amounted  to  $1,684,- 
980,000  (2,277,081,564  roubles).      In   this   amount   is 


PAPER   MONEY.  49 

included  $565,275,000  (763,869,467  roubles)  of  paper 
money,  or  bills  of  credit. 

On  January  1,  1875,  the  total  debt  had  increased  to 
$2,149,995,000  in  United  States  money.  Of  this  amount 
$580,000,000  (797,313,480  roubles)  was  bills  of  credit, 
or  paper  money.  About  $200,000,000  more  of  the 
total  was  treasury  paper,  which  circulates  to  a  consider- 
able extent  as  money.  The  total  paper  circulation  of 
Russia  is  therefore  about  $780,000,000,  or  over  1,000,- 
000,000  roubles.  While  this  shows  an  increase  of  about 
250,000,000  roubles  since  1858,  it  does  not  seem  to  war- 
rant the  assertion  of  the  Statesman's  Year-Book  (Lon- 
don) for  1876,  that  "  the  paper  money  circulation  of 
Russia  has  more  than  doubled  in  the  last  ten  years." 

Included  in  the  above  total  debt  there  are  about 
$200,000,000  of  railway  bonds,  on  which  the  interest  is 
guaranteed  by  the  government. 

The  Scie7itifie  Review,  of  Paris,  for  September  2, 
1876,  states  the  debt  of  Russia  at  1,494,070,791  roubles 
($1,097,047,960) ;  but  I  presume  this  refers  to  the  funded 
debt  of  the  empire  alone,  and  does  not  include  either  the 
treasury  paper  circulating  as  money  or  the  railway 
loans  on  which  the  interest  is  guaranteed  by  the  gov- 
ernment. 

ITALY. 

Paper  currency  in  Italy  is  furnished  mainly  by  the 
National  Bank  of  Italy,  whose  present  position  and  rela- 
tions to  the  national  government  have  existed  since 
1863.  Its  present  powers  to  issue  legal  tender  notes, 
etc.,  were  the  result  of  the  financial  embarrassments  of 
the  new  kingdom  finally  established  in  1861  as  a  result 
3 


50  HAND-BOOK    OF   FINANCE. 

of  the  Italian-French  and  Austrian  war  of  1859.  The 
capital  of  the  National  Bank  of  Italy  is  100,000,000  lire 
(a  lire  is  of  the  same  value  as  a  franc,  19^-  cents),  and 
in  October,  1868,  the  outstanding  circulation  of  the 
bank  amounted  to  775,879,712  lire,  nominally  equiva- 
lent to  $147,417,115  in  United  States  money,  or  at  the 
rate  of  about  $5TW  per  capita  of  the  nearly  27,000,000 
of  population  in  1872.  This  does  not  comprise  the  en- 
tire paper  currency  of  the  country,  but  it  is  the  greater 
part.  There  is  but  little  specie  in  circulation,  and  the 
bulk  of  specie  in  the  country  is  held  in  the  National 
Bank,  which,  in  October,  1868,  held  a  metallic  reserve 
of  178,000,000  lire,  or  equal  to  $83,800,000  in  United 
States  money.  Silver  being  a  legal  tender  for  any 
amount  in  Italy,  it  is  presumable  that  whatever  metal- 
lic reserve  may  be  in  the  bank  now  is  mainly  of  silver, 
and  also  that  whatever  other  coin  there  may  be  in  the 
kingdom  is  almost  exclusively  silver. 


SPAIN. 

The  National  Bank  of  Spain  has  a  capital  of  120,000,- 
000  reals  vellon  (equivalent  to  $6,000,000),  and  issues 
circulating  notes  to  the  amount  of  60,000,000  reals 
vellon,  or  equivalent  to  $3,000,000  in  United  States 
money.  Besides  this  a  portion  of  the  large  public  debt, 
which  in  May,  1872,  amounted  to  $1,511,000,000,  has 
circulated  as  money.  The  national  government  became 
bankrupt  in  1873,  the  payment  of  interest  on  the  public 
debt  having  ceased  in  July  of  that  year. 


PAPEK   MONEY.  51 


SWITZERLAND. 


In  Switzerland  there  are  twenty-eight  banks,  nearly 
all  of  which  issue  notes  to  circulate  as  money,  the  legal 
limit  of  such  notes  issued  by  each  bank  being  double 
the  amount  of  its  capital.  The  reform  in  the  banking 
system  of  Switzerland,  adopted  in  1875,  requires  each 
bank  to  receive  the  notes  of  all  other  banks  at  par,  and 
also  that  each  bank  shall  keep  a  metallic  reserve  on 
hand  equal  to  one  third  the  amount  of  its  notes  in  cir- 
culation. There  has  been  a  large  increase  of  paper 
money  in  Switzerland  in  the  last  few  years,  and  a  corre- 
sponding decrease  of  coin,  gold  having  almost  disap- 
peared. The  aggregate  of  paper  money  in  circulation 
at  various  periods  has  been  as  follows,  viz. : 

1870 18,000,000  francs. 

1873 47,000,000      " 

1873  (October) 72,000,000      " 

The  72,000,000  francs,  equal  to  $13,800,000,  gave  a 
paper  money  circulation  of  §5.30  per  capita  of  the 
2,600,000  of  population,  and  the  legal  limit  to  the  ag- 
gregate circulation  is  50  francs  per  capita,  which  would 
give  at  the  utmost  $26,000,000  of  paper  circulation. 
The  coin  circulation  is  mainly  of  silver. 

BELGIUM. 

The  Bank  of  Belgium  had  a  total  of  circulating  notes 
outstanding  June  1, 1872,  equal  to  $44,712,000  in  United 
States  money,  and  against  this  held  a  specie  reserve 
equal  to  $21,384,000.  On  February  1,  1873,  the  circu- 
lation had  increased  to  $60,264,000  and  the  specie  to 
$23,328,000. 


52 


HASTD-BOOK    OF   FINANCE. 


SWEDEN. 

In  Sweden  there  is  the  National  Bank  of  Sweden, 
with  a  circulation  in  June,  1872,  equal  to  $14,924,870 ; 
also  twenty-six  private  banks,  with  an  aggregate  circu- 
lation at  the  same  date  equal  to  $9,067,600.  The  notes, 
both  of  the  national  and  private  banks,  are  payable  in 
silver.  The  above  aggregate  of  notes  is  at  the  rate  of 
about  $5  per  capita  of  the  population.  The  coin  circu- 
lation is  almost  entirely  of  silver. 

TOTAL  OF  PAPER  MONEY  IN  EUROPE. 

"We  may  now  proceed  to  make  an  approximate  esti- 
mate of  the  increase  of  paper  money  in  Europe  in 
twenty-two  years  by  giving  the  amounts  in  millions  of 
dollars  (omitting  six  ciphers  in  each  amount),  giving 
the  amount  in  each  country  for  the  year  nearest  to  1854 
and  again  for  the  year  nearest  to  1876 : 


Great  Britain  and  Ireland 

France 

Germany 

Austria 

Italy 

Russia 

Spain 

Switzerland 

Belgium 

Sweden 

Increase 


Millions 

Millions 

of 

Year. 

of 

Dollars. 

Dollars. 

191 

1854 

235 

122 

1854 

493 

80 

1850 

200 

151 

1853 

289 

1854 

300 

558 

1858 

750 
*3 

3 

1870 

14 

44 

1872 

60 

20 

1865 

25 

1,169 

2,369 

1,200 

Year. 


1876 
1876 
1876 
1876 
1876 
1875 

1873 

1873 

1872 


*  This  is  only  the  notes  of  the  Bank  of  Spain. 


PAPER   MONEY.  53 

The  average  of  the  above  periods  is  seventeen 
years,  and  the  average  increase  of  paper  money  some- 
thing near  $62,000,000  per  annum.  But  a  point  of 
much  significance  is  that  of  the  total  increase  of  say 
$1,200,000,000  of  paper  money  in  Europe,  over  $800,- 
000,000  has  been  made  since  1866,  thus  showing  that  the 
period  of  greatest  contraction  in  the  United  States  has 
been  the  period  of  greatest  expansion  in  Europe. 


SUSPENSIONS  OF  SPECIE  PAYMENT  IN  ALL 
COUNTRIES. 


THE   UNITED  STATES. 

THERE  have  been  four  periods  of  suspension  of  specie 
payments  in  the  United  States  in  the  last  sixty-two 
years.  Two  were  caused  by  the  requirements  of  the 
government  to  carry  on  wars  (1814  and  1861),  and  two 
(1839  and  1857)  by  the  collapse  of  speculation  induced  by 
over-issues  of  bank  notes  under  systems  of  banking  not 
sufficiently  guarded  by  law  in  regard  to  the  security  of 
an  adequate  specie  reserve. 

In  1814  the  government  was  at  war  with  Great  Brit- 
ain, and  conducting  extensive  operations  along  the  line 
between  Canada  and  the  United  States.  From  1812  to 
1814  the  government  borrowed  in  all  $45,000,000.  Of 
the  first  810,000,000,  borrowed  in  1812,  $6,000,000  was 
taken  by  the  banks  in  the  middle  States,  as  also  a  con- 
siderable portion  of  the  other  loans.  The  New  England 
people  were  opposed  to  the  war,  and  consequently  the 
New  England  banks  took  scarcely  any  of  the  govern- 
ment loans." 

The  result  of  these  loans  to  the  government  was  that 
in  1814  all  the  banks,  except  those  in  New  England, 
suspended  specie  payments. 

As  a  means  of  assisting  the  financial  operations  of  the 
government,  and  also  to  encourage  the  banks  to  resume, 

*  Sumner's  History  of  American  Currency,  page  65. 


SUSPENSION'S    OF    SPECIE    PAYMENT.  55 

the  Bank  of  the  United  States  was  organized  in  1816-17. 
(This  was  the  second  institution  under  that  name,  the 
first  one  having  been  organized  in  1791  and  wound  up 
at  the  expiration  of  its  charter,  March  4,  1811.)  This 
second  charter  of  the  United  States  Bank  extended  to 
March  3,  1836,  when  there  was  a  strong  effort  to  have 
it  renewed,  and  a  bill  for  that  purpose  was  passed  by 
Congress  but  vetoed  by  President  Jackson,  July  4,  1832. 
The  Bank  of  the  United  States,  however,  continued 
its  business  under  a  charter  granted  by  the  legislature  of 
Pennsylvania.  From  1834  to  1838  was  a  speculative 
era,  not  only  in  the  United  States  but  elsewhere,  and 
owing  to  the  absence  of  any  legal  restrictions  on  the 
issue  of  bank  notes,  or  in  regard  to  reserves,  the  volume 
of  bank  notes  increased  from  $94,000,000  in  1834  to 
$149,000,000  in  1837.  The  result  was  a  collapse  of 
bubble  speculations  and  banks.  The  Bank  of  the 
United  States  suspended  October  9,  1839 ;  it  resumed 
again  on  January  15,  1841,  but  finally  succumbed  to  the 
general  tendency  of  affairs  on  February  4,  1841. 

The  next  suspension  was  in  1857,  from  the  same  causes 
as  in  1838-9.  None  of  the  three  foregoing  suspensions 
were  legalized  by  any  act  of  the  national  government. 
Legal  tender  paper  money  had  been  issued  by  some  of 
the  colonial  governments  prior  to  the  war  of  Independ- 
ence, but  these  were  prohibited  after  1750,  and  there 
was  no  legal  tender  paper  currency  from  that  time  until 
1862. 

The  act  authorizing  the  suspension  of  specie  payments 
and  the  issue  of  legal  tender  paper  money  will  be  found 
in  the  Digest  of  Monetary  Laws  in  the  act  of  February 
25,  1862,  and  the  amount  of  currency  outstanding  each 
year  under  this  and  subsequent  laws  will  be  found  in 


56 


HAND-BOOK    OF    FINANCE. 


the  table  of  paper  money  in  the  United  States  each  year. 
The  value  of  the  currency,  measured  in  gold,  fluctuated 
over  a  wider  range  in  a  shorter  period  in  the  United 
States  than  in  any  other  country  in  which  specie  pay- 
ments have  been  suspended.  From  97  cents  in  January, 
1862,  it  fell  to  38.7  (the  lowest  point)  in  July,  1864,  and 
rose  again  to  73.7  within  ten  months.*  The  fluctuation 
being  entirely  due  to  the  aspects  of  the  war. 

*The  following  table  is  from  the  Report  of  the  Comptroller  of  the  Currency 
for  1875: 


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SUSPENSIONS   OF   SPECIE   PAYMENT.  57 


GREAT  BRITAIN. 

The  Bank  of  England  suspended  specie  payments  on 
February  26,  1797,  in  consequence  of  a  drain  of  specie 
and  the  increase  of  public  expenditures  resulting  from 
the  war  with  the  French. 

Bank  of  England  notes  were  declared  legal  tender ; 
but  their  issues  were  so  much  restricted  by  law  that 
they  remained  at  par  until  1800,  when  the  issues  were 
increased,  and  they  fell  to  a  discount  of  8  per  cent  for 
gold.  In  1810  the  discount  was  13J  per  cent,  and  at 
another  period,  in  1815,  25  per  cent,  at  about  wThich 
depreciation  they  continued  until  1816.  In  1817  they 
had  risen  to  2|-  per  cent,  and  in  1819  declined  to  4r| 
per  cent.  In  May,  1821,  the  bank  resumed  specie  pay- 
ments. 


FRANCE. 

The  Bank  of  France  first  suspended  specie  payments 
in  1848 ;  the  cause  being  the  revolution  of  that  year, 
which  obliged  the  bank  to  make  large  advances  to  the 
provisional  government  and  the  city  of  Paris.  But  in 
order  to  prevent  too  great  depreciation  of  the  paper 
money  the  issues  of  the  bank  were  restricted  by  law  to 
350,000,000  francs.  In  1851  the  bank  resumed  specie 
payments. 

In  August,  1870,  the  Bank  of  France  again  sus- 
pended specie  payments  in  consequence  of  the  war  with 
Germany.  The  effects  of  this  upon  the  notes  of  the 
Bank  of  France  are  thus  described  by  M.  Victor  Bonnet, 
in  an  article  in  the  Revue  Des  Deux  Mondes: 


58  HAND-BOOK   OF   FINANCE. 

"  The  movements  of  the  paper-money  circulation  in- 
flicted on  France  by  the  war  are  destined  to  surprise  a 
multitude  of  people.  There  is,"  he  says,  "in  those 
movements  a  complete  overturning  of  the  economic  and 
financial  ideas  which  the  best  authorities  had  endeavored 
to  establish  in  the  previous  history  of  monetary  science. 
These  authorities  have  always  raised  their  warning  voice 
against  paper  money  and  legal  tender  laws.  They  tell 
us  with  one  accord  that  if  the  quantity  of  paper  money 
be  not  strictly  limited,  and  excessive  issues  prevented, 
the  public  confidence  will  fail,  and  depreciation  will 
soon  follow.  In  apparent  defiance  of  these  sound  prin- 
ciples, we  find  that  in  the  midst  of  the  war  troubles  of 
France,  paper  money  to  the  amount  of  1,800,000,000 
of  francs  was  issued,  and  has  been  kept  at  par  by  means 
of  a  coin  reserve  of  600,000,000  francs,  or  33  per  cent. 
This  paper  money  never  for  a  single  moment  lost  its 
value,  or  fell  to  a  discount  until  the  first  payments  were 
made  to  Prussia.  At  that  crisis  the  premium  on  gold 
rose  to  2-§-  per  cent,  and,  strange  to  say,  this  premium 
fell  immediately  when  the  law  was  passed  to  expand 
the  circulation,  and  to  increase  the  issues  beyond  1,400,- 
000,000  francs,  which  was  the  limit  at  first  assigned 
to   the   maximum  of  the  note  issues.     In  November, 

1871,  these  issues  were  2,300,000,000  francs,  and  the 
depreciation  was  2-J  per  cent.     At  the  end  of  January, 

1872,  the   issues  were    2,450,000,000    francs,  and    the 
depreciation  had  fallen  to  1  per  cent. 

"At  length,  after  the  lapse  of  a  certain  period,  when 
new  issues  had  been  authorized,  and  the  legal  limit  had 
been  fixed  at  3,200,000,000  francs,  the  premium  on  gold 
was  merely  nominal,  and  nobody  paid  any  attention  to 
it,  except  those  concerned  in  the   foreign   exchanges. 


SUSPENSIONS   OF   SPECIE   PAYMENT.  59 

The  singularity  of  this  was  the  more  noteworthy  be- 
cause these  large  emissions  of  notes  took  place  amidst 
grave  incertitude.  For,  in  the  first  place,  France  was 
paying  her  immense  indemnity  to  the  Prussians,  and 
was  seeking  in  every  possible  way  to  augment  her 
specie  resources ;  and,  secondly,  she  seemed  likely,  in 
spite  of  all  she  could  do,  to  lose  her  whole  aggregate  of 
coin  circulation.  Never  before  had  such  dangers  been 
surmounted  with  so  much  success." 


AUSTRIA. 

In  March,  1848,  in  consequence  of  the  revolution  in 
Yienna,  there  was  a  run  upon  the  National  Bank, 
which  suspended  specie  payment.  In  May,  1851,  the 
premium  on  silver  florins  over  bank  notes  was  30  per 
cent.  At  the  beginning  of  1854  it  had  declined  to  22 
per  cent.  On  November  1,  1858,  the  National  Bank  of 
Austria  resumed  specie  payments.  In  1859  the  war  of 
Italian  liberation,  in  which  Italy  and  France  were  com- 
bined against  Austria,  compelled  the  National  Bank  of 
Austria  to  again  suspend  specie  payment.  In  June, 
1859,  the  depreciation  of  the  notes  of  the  National 
Bank  was  42  per  cent,  in  September  of  the  same  year 
16  per  cent,  and  at  the  end  of  January,  1860,  was  33 
per  cent.  In  January,  1861,  the  depreciation  was  32 
per  cent,  and  at  the  beginning  of  1862  wras  about  27  per 
cent.  In  December,  1862,  an  act  was  passed  peremp- 
torily requiring  the  bank  to  resume  specie  payments  on 
January  1,  1867.  Under  the  influence  of  this  the  dis- 
count on  national  bank  notes  for  silver  decreased  to  6 
per  cent  in  1863.     But  in  1866  the  war  with  Prussia 


60  HAXD-BOOK    OF    FINANCE, 

obliged  an  increase  of  paper  money,  and  the  discount  on 
national  bank  notes  and  government  notes  increased 
to  19  per  cent  in  July,  1866,  and  21  per  cent  in  Janu- 
ary, 1867,  and  was  reduced  again  to  15  per  cent  by  the 
end  of  that  year.  During  the  years  1874  and  1875  the 
premium  on  silver  over  bank  or  government  notes 
averaged  about  5  per  cent. 


ITALY. 

In  Italy  there  was  scarcely  any  paper  money  in  cir- 
culation previous  to  1859,  but  the  war  of  Italian  libera- 
tion, which  caused  the  Bank  of  Austria  to  suspend  in 
1859,  also  obliged  great  expenditures  on  the  part  of  the 
new  Italian  government,  and  the  Xational  Bank  of 
Italy,  which  had  been  founded  under  a  royal  decree  in 
1863,  by  the  consolidation  of  the  National  Bank  of 
Turin  with  that  of  Tuscany,  had  already  made  large 
advances  to  the  new  government.  The  latter,  finding 
that  it  could  no  longer  raise  money  by  popular  loans 
(the  price  of  its  "rentes"  having  fallen  to  45  per  cent), 
and  requiring  still  further  aid  from  the  bank,  authorized 
it,  in  1866,  to  issue  inconvertible  legal  tender  paper 
money.  The  total  of  government  and  bank  notes  in 
circulation  in  April,  1865,  had  been  stated  at  247,000,- 
000  francs,  or  $49,000,000,  but  the  result  of  the  new 
law  was  that  by  1874  the  total  paper  money  amounted 
to  1,500,000,000  francs,  or  $300,000,000.  In  1866  the 
depreciation  of  the  paper  money  was  19  to  20  per  cent, 
but  with  a  largely  increased  amount  in  1874  the  depre- 
ciation was  only  3  per  cent,  and  at  the  beginning  of 
1876  about  7  per  cent. 


SUSPENSIONS   OF   SPECIE   PAYMENT.  61 


RUSSIA. 

Specie  payments  have  been  suspended  in  Russia  for 
more  than  60  years.  During  the  period  from  the 
suspension  to  1870  the  depreciation  of  the  paper  money 
fluctuated  over  a  range  from  17  to  29  per  cent.  Ac- 
cording to  the  reports  of  the  last  few  years  the  range 
of  depreciation  has  been  from  10  to  15  per  cent. 


BRAZIL. 

Specie  payments  have  been  suspended  in  Brazil  for 
nearly  50  years.  During  that  time  there  have  been 
various  unsuccessful  attempts  to  resume.  One  plan  upon 
which  these  attempts  were  made  was  to  reduce  the  value 
of  the  metallic  monetary  unit.  Thus  the  millreis,  which 
is  the  monetary  unit,  and  is  now  established  at  the 
equivalent  of  54rJ-  cents  in  United  States  money,  was 
originally  established  at  $136.35.  The  other  method, 
upon  which  there  have  been  several  attempts  to  resume 
—  the  last  one  in  1858  —  was  by  contracting  the  cur- 
rency. In  1848,  incident  to  the  cessation  of  the  slave 
trade,*  there  was  a  large  importation  of  gold  bullion. 
This  was  coined  and  put  into  circulation  by  the  govern- 
ment, and  for  a  time  it  was  claimed  specie  payments 
were  resumed,  but  the  gold  soon  went  out  again  in  the 
adjustment  of  balances  created  against  Brazil  in  her 
foreign  trade.  On  this  occasion  it  was  thought  that  the 
specie  once  put  into  circulation  at  par  with  paper  would 
maintain  the  latter  at  par.     But  after  the  specie  had 

*  Bankers'  Magazine  for  April,  1875. 


62  HAND-BOOK   OF   FINANCE. 

disappeared  the  theory  was  that  the  temporary  equality 
of  the  two  was  caused  by  a  depreciation  of  gold,  which 
was  recovered  when  the  metal  disappeared. 


EFFECTS  ON  THE  VALUE  OF  PAPER  MONEY. 

The  foregoing  summary  of  the  effects  of  the  suspen- 
sion of  specie  payments  in  various  countries  to  depress 
the  value  of  the  currency  affords  the  following  facts : 

First.  That  the  depreciation  by  no  means  corresponds 
to  the  volume  of  the  currency.  This  is  illustrated  by 
the  experience  in  France  and  Italy,  where  the  value  of 
the  currency  increased  concurrent  with  an  increase  of 
its  volume. 

Second.  That  coin  put  forcibly  into  circulation  at  par 
with  an  inconvertible  currency,  as  was  the  case  in 
Brazil,  will  immediately  flow  out  of  the  country.  Not 
being  used  to  redeem  the  currency,  it  is  only  a  commod- 
ity for  which  there  is  no  use,  and  like  other  commodi- 
ties is  temporarily  depressed  in  value  to  an  extent 
which,  though  slight,  is  sufficient  to  cause  its  exporta- 
tion. 

The  causes  which  operate  upon  the  value  of  an  incon- 
vertible currency,  as  compared  with  gold  and  silver, 
may  be  specified  as  follows,  viz.: 

First.  The  prospect  of  redemption.  This  is,  of  course, 
the  most  potent,  producing  much  the  greatest  effect 
and  in  much  shorter  periods  of  time.  This  prospect 
may  be  diminished  by  the  unfavorable  aspect  of  a  war, 
as  was  frequently  the  case  in  the  United  States,  or  by  a 
decrease  of  revenue  or  a  decrease  of  the  stock  of  coin  in 
the  treasury,  or  by  a  failure  of  important  crops,  which 


SUSPENSION'S   OF   SPECIE    PAYMENT.  63 

would  show  the  probability  of  a  larger  export  move- 
ment of  coin.  The  prospect  of  redemption  would,  how- 
ever, be  increased  by  the  opposite  of  any  of  the  above 
circumstances.  In  the  case  of  France,  which  M.  Victor 
Bonnet  considers  so  remarkable,  there  was  an  increase 
of  coin  in  the  Bank  of  France  concurrent  with  the  in- 
crease of  paper  money,  and  though  it  was  not  near  so 
large  as  the  increase  of  bank  notes,  it  was  sufficient  to 
inspire  the  public  with  confidence  in  the  ability  of  the 
French  financiers  to  borrow  the  whole  amount  for  the 
indemnity  to  Germany,  and  also  to  redeem  the  notes  of 
the  bank.  In  short,  this  was  "confidence" — confidence 
in  the  redemption  of  the  paper  money  in  coin. 

Second.  The  demand  for  currency  to  use  in  the  usual 
payments  in  trade — this  demand,  of  course,  fluctuating 
with  the  increase  or  decrease  of  the  general  volume  of 
trade  —  and  causing  an  increase  in  the  coin  value  of  the 
currency.  Thus,  if  we  assume  that  the  prospect  of 
redemption  of  the  currency  in  coin  would  fix  its  value 
for  the  time  being  at  say  75  cents  on  the  dollar,  an 
increase  of  internal  traffic  might  cause  a  premium  on 
this  price.  The  inconvertible  paper  money  having  ex- 
pelled coin  from  the  channels  of  circulation  might  be 
inadequate  to  supply  the  requirements  for  money,  and 
yet  the  prospect  of  redemption  be  so  remote  that  the 
premium  paid  for  the  paper  money  as  the  only  instru- 
ment of  exchange  would  not  be  sufficient  to  raise  it  to 
par  with  coin.  The  operation  of  this  was,  I  think,  visi- 
ble to  some  extent  in  Italy.  Previous  to  the  establish- 
ment of  the  new  kingdom,  in  1860,  there  had  been  but 
little  progress  of  any  kind  in  Italy  ;  the  habits  and  ideas 
of  its  people  seemed  fossilized  in  the  forms  of  the  seven- 
teenth century.     But  with  the  new  kingdom  a  new  era 


64  HAND-BOOK    OF   FINANCE. 

began  in  economic  and  industrial  affairs.  Bank  notes 
were  scarcely  known  in  Italy  before  1860,  but  between 
1866  and  1874  the  six  banks  of  issue  in  the  kingdom 
had  increased  their  branches  from  fifty-two  to  ninety- 
five,  and  productive  and  manufacturing  industries  were 
greatly  stimulated.  From  1869  to  1872  the  imports 
of  foreign  goods  increased  25  per  cent,  and  the  value  of 
the  total  annual  exports  increased  50  per  cent.  But 
with  all  this  increase  of  traffic  and  industry  the  annual 
expenditures  of  the  government  exceeded  the  revenue 
by  nearly  $50,000,000  each  year,  and  the  aggregate  of 
these  deficits  from  1861  to  1873  was  about  $500,000,000. 
Notwithstanding  this  continued  increase  of  debt  and  the 
increase  of  the  inconvertible  paper  money  from  $49,- 
000,000  in  1865  to  $300,000,000  in  1874,  the  value  of 
the  paper  money,  as  compared  with  gold  and  silver, 
advanced  from  an  average  of  about  80  cents  in  1865-6 
to  about  93  to  95  cents  in  1874-6.  There  were,  of 
course,  many  concurrent  features  in  the  political  and 
industrial  affairs  of  the  country  which  exercised  their 
influence  to  cause  fluctuations  in  the  prospect  of  redemp- 
tion ;  but  coin  had  been  practically  expelled  from  the 
country,  and  the  volume  of  paper  money  being  limited, 
the  premium  paid  for  it  over  its  real  value,  though  not 
sufficient  to  raise  it  to  par,  was,  I  think,  largely  the 
cause  of  the  advance  of  12  to  15  per  cent  from  1866  to 
1876. 

Third.  The  temporary  depreciation  in  the  value  of 
gold  and  silver,  either  brought  from  abroad  and  forced 
into  the  market  by  coinage  and  issue  by  the  govern- 
ment, as  in  the  instance  in  Brazil,  or  by  production,  as 
in  our  own  country.  The  inconvertible  paper  currency 
having  deprived  the  gold  and  silver  of  their  function  as 


SUSPENSIONS   OF   SPECIE    PAYMENT.  65 

money,  the  latter  become  only  commodities,  and  as 
such,  being  cheaper  than  in  countries  where  they  are 
used  both  as  a  commodity  and  as  money,  they  are  im- 
mediately exported.  I  am  aware  that  some  political 
economists  deem  it  almost  a  heresy  to  say  that  the 
value  of  gold  can  be  less  in  one  country  than  in  an- 
other. But  to  me  it  seems  plain  that  gold,  like  wheat 
or  cotton,  flows  to  the  market  where  it  bears  the  highest 
value  relatively  to  other  things.  The  precious  metals 
have  always  been  selected  as  standards  of  valuation,  not 
because  their  value  was  unchangeable,  but  because  they 
changed  less  than  those  of  other  commodities.  Paper 
money  has  no  intrinsic  value,  but  only  a  prospective 
one,  viz.,  the  prospect  of  redemption.  It  is,  therefore, 
impossible  for  paper  money  to  be  a  standard  of  values. 
It  may  appear  to  be  so,  but  in  reality  the  values  that 
seem  to  be  measured  by  a  "  paper  money  standard,"  are 
measured  by  the  gold  and  silver  standards  modified  by 
the  prospect  of  redemption  of  the  paper  money.  The 
paper  money  price  of  anything  is  only  the  gold  or  silver 
price  with  an  allowance  made  for  the  uncertainty  of 
ever  getting  the  gold  and  silver  promised  in  the  paper 
money.  But  this  temporary  depreciation  of  gold  or 
silver,  in  any  country,  is  concealed  by  the  use  of  paper 
money;  consequently  the  prices  of  other  commodities 
do  not  immediately  decline,  buyers  and  sellers  are  slow 
to  adjust  prices  to  a  change  in  the  value  of  the  precious 
metals,  and  in  nearly  all  cases  the  accumulation  of 
cheapened  precious  metals  flows  out  in  exportation 
before  any  change  is  made  in  the  currency  prices  of 
commodities ;  but,  in  the  meantime,  the  inconvertible 
paper  money  has  been  overvalued. 


GOLD  AND  SILVER  COIN  IN  EUROPE. 


I 


X  1800,  the  total  amount  of  gold  coin  in  the  United 
Kingdom  was  estimated  at  only  £8,000,000. 

In  1814,  the  total  of  gold  coin  in  the  kingdom  was 
estimated  by  Newmarch  at  £36,000,000,  this  amount 
including  the  coin  in  the  bank.  The  same  authority 
also  estimated  the  total  of  gold  and  silver  coin  in  the 
kingdom,  at  the  close  of  1856,  at  £70,000,000. 

In  1868,  Professor  W.  Stanley  Jevons  made  a  partial 
census  of  the  gold  and  silver  coins  in  the  United  King- 
dom, and,  upon  this  as  a  basis,  made  an  estimate  of  the 
whole  amount.  His  conclusion  was  that  the  total 
amount  of  gold  coin  in  the  kingdom  in  March,  1868, 
was  not  to  exceed  £80,000,000,  and  that  it  was  possi- 
bly £3,000,000  to  £5,000,000  less  than  that  aggregate. 
The  result  of  his  estimate,  which  included  the  gold  in 
bank,  was  as  follows  : 

Sovereigns  in  circulation £64,500,000 

Sovereigns  undistributed,  in  bank 3,500,000 

Half  sovereigns  (24,000,000) 12,000,000 

Total  gold  circulation £80,000,000 

The  amount  of  silver  coin  in  the  kingdom  was  at 
the  same  time  estimated  at  £14,000,000. 

The  London  Economist  of  March  15,  1873,  estimated 
that  the  amount  of  gold  coin  in  the  kingdom  had  been 
increasing  at  the  rate  of  about  £2,000,000  per  annum 
for  several  years.     This  estimate  of  increase  was  based 


GOLD   AND   SILVER   COIN   IN"   EUROPE. 


67 


upon  the  annual  movements  of  coin  to  and  from  the 
Bank  of  England  and  the  interior  at  the  seasons  of  the 
spring  and  fall  settlements  and  crop  movements. 

Assuming  this  ratio  of  increase  to  be  correct,  Dr. 
Edward  Young,  of  the  Bureau  of  Statistics,  at  Wash- 
ington, made  an  estimate  of  the  amount  of  gold  and 
silver  coin  in  the  United  Kingdom  at  the  close  of  1872, 
with  the  following  result,  viz. : 

Total  amount  of  gold  coin  circulating  in  the  United 

Kingdom  at  the  close  of  1872  .... .£84,551,000 

Total  amount  of  silver  coin  circulating  in  the  United 

Kingdom  at  the  close  of  1872 15,000,000 

Total  amount  of  bronze  coin  circulating  in  the  United 

Kingdom  at  the  close  of  1872 1,148,000 

Assuming  that  silver  coin  constituted  about  the  same 
proportion  of  the  whole  in  1856  as  in  1868,  we  have 
the  following  approximate  statement  of  the  amounts  of 
gold  and  silver  coin  in  Great  Britain  and  Ireland  at  the 
periods  stated,  viz. : 


Gold  Coin. 

Silver  Coin. 

1856 

£60,000,000 
80,000,000 
84,551,000 
88,500.000 

£10.000  000 

1868 

14,000,000 
15.000  000 

1872 

1876 

16,000,000 

Owing  to  the  fact  that  previous  to  1795  the  gold 
coins  of  France  were  very  much  undervalued  as  a  legal 
tender,  gold  was  almost  entirely  banished  from  France, 
and  even  after  there  was  a  modification  of  this,  in  1795, 
silver  continued  almost  the  exclusive  metallic  currency 
of  France  until  a  comparatively  recent  period.  In 
1848,  also,  the  Bank  of  France  suspended  specie  pay- 
ments in  consequence  of  the  revolution,  and  its  notes  to 
the  amount  of  350,000,000  francs  were  made  a  legal 
tender,  which  condition  of  things  lasted  until  1851.     It 


68  HAND-BOOK   OF  FINANCE. 

may  therefore  be  presumed  that  what  coin  was  not 
driven  out  of  the  country  by  the  suspension  of  specie 
payments  was  at  least  three-fourths  silver.  The  popula- 
tion of  France  in  1848  was  not  to  exceed  35,000,000, 
and  allowing  eighty  francs  per  capita  as  an  estimate  of 
the  probable  amount  of  coin  and  notes  in  use  at  that 
time,  we  have  an  aggregate  of  2,800,000,000  francs, 
from  which  deduct  350,000,000  francs  of  notes,  and  it 
leaves  an  approximate  estimate  of  2,450,000,000  francs 
of  coin,  which,  if  one-fourth  gold,  would  leave  silver 
coin  to  the  amount  of  1,840,000,000  francs. 

Koswag  estimated  the  amount  of  coined  money  in 
France  in  1856  at  4,000,000,000  francs,  and  expressed 
the  belief  that  in  the  nine  years  to  1865  the  aggregate 
had  declined  to  3,000,000,000. 

M.  Louvet,  minister  of  agriculture  and  commerce, 
and  also  M.  Charles  le  Touze,  estimated  the  amount  of 
coined  money  in  France  in  1870  at  from  5,000,000,000 
to  6,000,000,000  francs. 

The  French  indemnity  to  Germany,  in  accordance 
with  the  treaty  signed  at  Paris  February  26,  1871,  was 
5,000,000,000  francs,  of  which  1,000,000,000  was  to  be 
paid  in  1871,  and  the  rest  within  three  years.*     Not- 

*M.  Wolowski,  a  member  of  the  Institute  and  a  deputy  to  the  National 
Assembly,  printed  an  article  in  the  Journal  des  Economists,  in  December,  1874, 
in  which  he  summed  up  the  French  payments  to  Germany  as  follows,  viz.: 

To  sum  up  the  totals  of  remittances  made  to  Germany,  we  delivered: 

Francs.     C. 

In  notes  on  the  Bank  of  France 125,000,000  00 

In  French  gold 273,003,058  10 

In  French  silver 239,291,875  75 

lu  German  specie  and  bank  notes 105,039,145  18 

In  thalers ". 2,185,313,721  04 

In  Frankfort  florins 235,128,152  79 

In  marks  banco  of  Hamburg 265,260.990  29 

In  marks  of  the  Empire 72,072,309  62 

In  florins  of  Holland 250,540,821  46 

In  Belgian  francs 295,704,546  40 

In  pounds  sterling 637.349,832  28 

Total 4,990,660,453  29 


GOLD   AND   SILVER   COIN   IN   EUROPE.  69 

withstanding  the  remarkable  financial  ability  of  the 
French  ministers,  by  which  a  system  of  gigantic  bor- 
rowing in  foreign  countries  was  inaugurated,  there  was  a 
considerable  drain  of  specie  from  France,  though  noth- 
ing like  so  large  as  was  generally  anticipated.  This 
movement  of  coin  was,  however,  in  all  probability,  suffi- 
cient to  cause  an  important  decrease  in  the  stock  of 
coined  money  in  France  from  1870  to  1874.  If  even 
the  lower  estimate  made  by  Louvet  of  the  amount  of 
coin  in  France  in  1870  was  not  too  large,  it  must  be 
remembered  that  there  was  an  increase  of  over  $250,- 
000,000  of  paper  money  in  France  from  1870  to  1875, 
and  that  the  premium  of  even  2-J  per  cent  on  gold  over 
paper  would  cause  a  large  export  of  gold.  A  very  lib- 
eral estimate  of  the  aggregate  of  coin  in  France — in- 
cluding the  metallic  reserve  of  the  bank  —  in  1875  could 
not  exceed  5,000,000,000  francs,  or  say  from  $1,000,- 
000,000  to  $900,000,000.  This  amount  of  coin,  together 
with  nearly  $500,000,000  of  bank  circulation  in  1875, 
would  give  the  population  of  France  an  aggregate  cir- 
culation so  much  larger  per  capita  than  any  other  coun- 
try in  the  world  that,  in  view  of  the  fact  that  all  figures 
of  the  amounts  of  coin  are  only  estimates,  I  should  be 
inclined  to  estimate  the  amount  of  coin  in  France  in 
1875  even  lower  than  $900,000,000.  But  as  it  seems 
very  difficult  to  discover  where  and  how  the  presumed 
aggregate  of  gold  in  the  world  is  distributed,  I  take  the 
higher  estimate.  As  arguments  against  any  important 
increase  in  the  amount  of  coin  in  circulation  in  France 
from  1870  to  1875,  we  have  the  following  tacts:  first, 
the  note  circulation  of  the  Bank  of  France  was  increased 
nearly  1,250,000,000  francs,  or  $250,000,000,  from  Jan- 
uary, 1870  to  January,  1875.      This  was  intended  to, 


70 


HAND-BOOK   OF   FINANCE. 


and  probably  did,  substitute  an  equal  amount  of  coin 
paid  to  Germany;  second,  France  borrowed  nearly 
4,000,000,000  francs,  or  §800,000,000,  of  the  money 
to  pay  the  indemnity,  in  Great  Britain,  Holland,  Bel- 
gium and  Germany ;  and  though  the  foreign  holding 
of  this  French  loan  had  undoubtedly  been  considerably 
reduced  by  1875,  the  average  annual  interest  to  be  paid 
by  France  to  foreign  creditors  during  the  four  years  to 
1875  could  not  have  been  less  than  $50,000,000,  or  an 
aggregate  of  8200,000,000,  in  gold  in  the  four  years 
from  1871  to  1875. 

If  the  constitution  of  the  metallic  reserve  in  the 
Bank  of  France  at  different  periods  may  be  accepted  as 
an  index  of  the  relative  proportions  of  gold  and  silver 
coins  in  circulation,  it  would  show  that  even  down  to 
1869  the  coin  in  circulation  in  France  was  about  three 
fourths  silver,  viz. : 

In  1860,  of  the  total  of  about  425,000,000  francs, 
average  metallic  reserve  of  the  Bank  of  France,  only 
100,000,000  was  gold.  But  in  1871  there  was  a  great 
change  in  the  policy  of  the  bank  in  this  respect.  It 
sought  to  dispose  of  its  silver  and  hoard  gold.  During 
the  year  1875  the  bank  paid  out  a  total  of  1,127,500,000 
francs  in  coin,  of  which  630,000,000  francs  was  gold 
and  495,000,000  francs  was  silver.  The  change  in  the 
proportions  of  gold  and  silver  in  the  reserve  of  the 
bank  is  thus  stated  in  an  article  in  the  Bankers'  Maga- 
zine for  December,  1874 : 


Maximum 
of  the  Years. 

1869^ (Dec.  23)~ 

1871  (Aug.  25). 

1872  (Dec.  18). 
1873 (June  5 ) . . 
1874  (Mar.  31). 
1874  June  17). 


In  Gold. 
Francs. 


704.000.000 
591,000,0001 
057.000.000 
690,000.000 
729,000.000 
884.000.000 


In  Silver. 
Francs. 

50UWK)0: 
98.000.000i 
133.000.000 
125,000,000 
311.000.000 
318.000.000 


Total  in 
Francs. 


Total  in 
Dollars. 


1,266,000,000 

691,000,000 

792.000.000 

820,000,000 

1.040.000.000 

1.163,000.000 


253,200.000 
138.200,000 
158,400.000 
164,000,000 
208,000.000 
232.600.000 


GOLD   AKD   SILVER   COItf   IN   EUROPE.  71 

Since  the  above  dates  the  relative  amount  of  silver 
in  the  bank  reserve  has  remained  at  about  one  quarter 
of  the  whole.* 

The  proportions  of  gold  and  silver  paid  out  by  the 
Bank  of  France  during  1875  afford  ground  for  the  pre- 
sumption that  the  proportion  of  silver  in  circulation 
among  the  people  is  much  larger  than  in  the  reserve  of 
the  bank.  It  is  not  probable  that  those  who  received 
metallic  money  from  the  bank  would  have  accepted  four 
ninths  of  it  in  silver  coin  if  that  was  not  about  the  pro- 
portion of  silver  in  the  general  circulation  of  the  country. 
But  there  is  another  fact  which  indicates  the  use  of  a 
large  amount  of  silver  coin  in  France,  viz. :  that  the 
Bank  of  France  issues  very  few  notes  of  small  denom- 
inations. Of  the  notes  in  circulation  in  1875  the  total 
value  of  those  of  denominations  as  small  as  5  francs  was 
only   $1,342,000,    and    the   total    value   (expressed   in 

*  In  reply  to  an  inquiry  of  the  Cincinnati  Commercial  on  this  point,  the  fol- 
lowing letter  was  received  by  the  editor  of  that  paper  from  the  banking  house 
of  Marcuard,  Andre  &  Co.  at  Paris,  viz.: 

Paris,  June  S3,  1876. 
Sir, — We  can  reply  as  follows  to  the  several  inquiries  conveyed  by  your  letter 
of  the  2d  inst.:  The  5-franc  piece  is  an  unlimited  legal  tender,  and  may,  there- 
fore, be  employed  to  any  extent  for  payments;  the  smaller  silver  coins  are  of 
inferior  fineness,  and  acceptance  of  the  same  cannot  be  enforced  beyond  an 
amount  of  50  francs  per  each  payment.  The  Bank  of  France  issues  no  more 
5-franc  notes,  and  destroys  those  which  return  to  the  bank  in  course  of  circula- 
tion. The  bank  has  at  present  on  hand  581,258,000  francs  in  silver  coin  and 
bullion,  1  408.340,000  francs  in  gold  coin  and  bullion.  In  March.  1875,  the  bank 
held  495,000,000  francs  in  silver,  and  1,325.000,000  francs  in  gold,  which  shows 
that  the  respective  increase  of  the  silver  and  gold  paid  in  have  taken  place  in 
proportions  which  do  not  differ  so  widely  as  might  be  anticipated  from  the  greal 
abundance  of  silver.  From  our  previous  remarks  on  5-franc  pieces  it  follows 
that,  in  case  the  bank  resumes  specie  payments,  these  could  be  legally  effected 
in  silver  coin,  using  the  pieces  inferior  to  5  francs,  to  the  maximum  extent  of 
50  francs  per  payment.  We  will  add,  for  your  guidance,  that  J^-franc  pieces 
have  been  withdrawn  from  circulation,  and  are  replaced  by  20-centime  pieces 
(one  fifth  franc).  The  commercial  value  of  gold  and  silver  is  as  follows,  viz.: 
Silver  of  1.000-1,000  fineness,  218.89  francs  per  kilogramme;  gold  of  1.000-1.000 
fineness,  3.434.44  francs  per  kilogramme.  The  kilogramme  is  equivalent  to  32 
1.543-10,000  ounces.  It  is  on  the  above  basis  that  silver  and  gold  are  quoted 
with  so  much  per  cent  loss  or  premium.  The  mint  receives,  however,  these 
two  metals  on  the  following  footing:  Gold.  3.437  francs  per  kilogramme ;  silver, 
230.56  francs  per  kilogramme.  In  consequence  of  the  international  treaties,  the 
mint,  being  provided  with  silver  for  its  coinage  till  December,  1878,  does  not, 
for  the  present,  receive  any  more  of  this  metal. 

Marcuard,  Andre  &  Co. 


72 


HAND-BOOK   OF   FINANCE. 


United  States  money)  of  notes  as  low  as  25  francs  and 
including  all  those  of  smaller  denominations  was  only 
$62,238,280.  Now  in  the  United  States,  with  a  popu- 
lation just  about  equal  to  that  of  France,  the  total 
amount  of  notes  of  denominations  as  small  as  one  dollar 
and  under,  including  the  fractional  currency,  is  about 
$75,000,000,  or  nearly  sixty  times  as  much  as  the  5 
franc  notes  of  the  Bank  of  France.  Comparing  the 
amount  of  notes  in  the  United  States  of  the  denomi- 
nation of  $5  and  under  with  the  amount  of  French  notes 
of  the  denomination  of  25  francs  and  under,  we  find 
$224,500,000  of  the  former  in  the  United  States  against 
only  $62,238,000  of  the  latter  in  France.  This  defi- 
ciency of  small  notes  in  France  is  undoubtedly  supplied 
by  silver  coin.  Still  another  fact,  which  has  a  bearing 
on  this  question,  is  that  the  total  coinage  of  France  in 
the  four  years  from  1869  to  18T2  inclusive  was,  of  gold, 
330,000,000  francs,  and  of  silver  114,000,000  francs. 
The  export  of  coin  from  France  is  probably  more  largely 
of  gold  than  of  silver. 

Upon  the  above  facts  as  a  basis  we  may  estimate  the 
amounts  of  gold  and  silver  coin  in  France  at  various 
periods  approximately  as  follows,  expressed  in  their 
equivalent  in  United  States  money  : 


Gold  Coin. 

Silver  Coin. 

1848 

$122,000,000 
200,000.000 
250,000,000 
650,000,000 

$368,000,000 

1856 

600,000,000 

1870 

750,000,000 

1875 

350,000,000 

There  are  no  statistics,  nor  even  any  estimates,  that 
are  of  any  value  in  regard  to  the  amount  of  coin  in 
Germany.     The  entire  lack  of  anything  like  uniformity 


GOLD    AND    SILVER   COIN    IN    EUROPE.  73 

in  the  official  reports  of  the  different  German  States 
previous  to  their  consolidation  into  the  present  empire 
makes  it  worse  than  useless  to  rely  on  them  as  a  basis 
for  estimating  the  amount  of  coin  in  the  country. 

In  1868,  with  a  view  to  ascertaining  the  condition 
and  amount  of  the  monetary  circulation  of  the  North 
German  Confederation,  Bismarck,  then  chancellor,  ad- 
dressed circulars  of  inquiry  to  all  the  states  of  the  con- 
federation, which  were  the  same  as  those  in  the  present 
German  Empire  wTith  the  exception  of  Bavaria,  Wur- 
temburg  and  Baden,  which  were  not  in  the  confedera- 
tion. In  response  to  these  circulars  a  large  mass  of 
statistics  of  coinage  was  obtained,  and  upon  these  an 
estimate  was  made  that  the  total  amount  of  coin  in  the 
hands  of  the  people  and  as  reserves  in  the  banks,  in 
1869,  was  632,435,362  thalers,  composed  of  442,147,371 
thalers  of  silver  and  173,219,850  thalers  of  gold. 

The  utter  unreliability  of  this  estimate  will  be  seen 
from  the  following  facts :  First,  that  the  aggregate  of 
632,435,362  thalers  is  obtained  by  simply  giving  the 
coinage  of  eight  different  German  mints  for  all  sorts  of 
periods,  varying  from  thirty-three  years  to  over  one 
hundred  years.  From  these  sums  were  deducted  the 
recoinages  of  their  own  coins  by  the  same  mints,  and 
from  the  disjecta  membra  thus  obtained,  without  mak- 
ing any  allowance  for  either  import  or  export  of  coin  or 
bullion,  was  drawn  the  conclusion  that  in  1869  there 
was  the  above  mentioned  amounts  of  gold  and  silver 
coin  in  circulation  and  in  banks  in  Germany.  This 
estimate  of  coin  in  Germany  has  been  used  in  Congress 
and  in  many  political  discussions  in  the  United  States, 
but  the  basis  on  which  it  was  made  was  so  incomplete 
as  to  be  utterly  worthless,  and  there  is  nothing  to  even 
4 


74  HAND-BOOK   OF   FINANCE. 

give  countenance  to  the  estimate  except  that  it  corre- 
sponded to  the  popular  belief  that  there  was  not  so 
much  coin  in  Germany  as  in  France.  The  estimate  of 
$900,000,000  of  coin  in  France  in  1870  would  give  an 
average  of  about  $18  per  capita  of  the  population 
(38,000,000  in  1866  and  36,000,000  in  1872),  whereas 
the  estimate  of  coin  in  Germany  would  give  about 
$15  per  capita  of  the  estimated  population  of  30,000,- 
000  in  Germany  in  1870.  It  is  in  view  of  these 
latter  facts  alone  that  the  estimate  of  a  coin  circulation 
in  Germany  in  1869-70,  equal  to  $455,000,000  in  coin 
of  the  United  States,  is  worthy  of  any  consideration. 

The  reports  of  German  coinage  made  to  Bismarck  in 
1869  are,  however,  of  some  value  in  determining  the 
proportion  of  silver  to  gold  coins  in  circulation  at  about 
40  per  cent  of  gold  coins  to  60  per  cent  of  silver. 

If,  therefore,  we  accept  the  estimate  of  $450,000,000 
of  coin  in  Germany  in  1869-70,  we  must  make  a  large 
addition  for  the  effect  of  the  payment  of  the  French 
indemnity  of  5,000,000,000  francs  from  1870  to  1874. 

France  paid  her  indemnity  to  Germany  somewhat  as 
follows :  20  to  25  per  cent  of  the  whole  in  the  actual 
transmission  of  coin  from  France  to  Germany  ;  about  35 
per  cent  of  the  whole  amount  was  borrowed  in  Eng- 
land, Belgium  and  Holland,  and  bills  on  those  countries 
remitted  to  Berlin  for  the  amounts  borrowed,  thus  giv- 
ing Germany  the  power  to  draw  an  aggregate  of  about 
$350,000,000  of  coin.  About  30  to  35  per  cent  more 
of  the  total  indemnity  was  borrowed  in  Germany.  This 
latter  item  would  not  cause  any  influx  of  coin  into 
Germany  except  for  the  interest  on  the  loans.  It  is 
also  well  known  that  the  coin  was  not  drawn  very 
rapidly  by  Germany  on  the  French  bills  on  England, 


GOLD   AlSTD   SILVER   COIN   IN   EUROPE.  75 

Belgium  and  Holland,  and  much  of  the  coin  thus  drawn 
would  soon  gravitate  back  to  the  countries  from  whence 
it  came,  so  that  it  is  probable  that  the  greatest  addition 
to  the  aggregate  of  coin  in  Germany  at  any  time  from 
the  payment  of  the  war  indemnity  did  not  exceed 
$400,000,000,  about  the  close  of  1873  *  "We  may,  there- 
fore, make  the  following  estimate  in  United  States  money 
of  the  amount  of  gold  and  silver  coin  in  Germany : 


Gold  Coin. 

Silver  Coin. 

1869 

$180,000,000 
380,000,000 

$270,000,000 

1874 

370,000,000 

The  foregoing  estimates  of  the  amounts  of  each  gold 
and  silver  coins  in  Great  Britain,  France  and  Germany 
have  been  made  after  taking  into  consideration  not  only 
all  previous  estimates  made  by  various  acknowledged 
authorities,  but  also  all  official  reports  and  documents 
that  seem  to  have  any  important  bearing  on  the  ques- 
tion. But  for  the  remaining  countries  of  Europe  even 
an  approximate  estimate  of  the  total  amount  of  coin  in 
circulation  and  in  banks  is  much  more  difficult,  because 
there  are  no  official  data  that  give  any  trustworthy 
information  on  the  subject.     In  proceeding,  therefore, 

*  The  London  Economist  of  September  13,  1873,  remarks  that  the  indemnity- 
has  been  paid  with  but  slight  use  of  bulliou  and  without  a  drain  of  specie  from 
France.  This  result  has  been  achieved  to  a  very  great  extent  by  a  gigantic 
borrowing  on  the  part  of  the  French  government  and  individuals  abroad.  A 
large  part  of  the  loan  is  still  held  out  of  France  by  the  syndicates  of  bankers 
and  other  capitalists  whose  bills  received  in  payment  of  installments  have  been 
handed  over  to  the  German  government.  Another  part  of  the  loan  is  held  by 
individuals,  who  have,  either  directly  or  indirectly,  exported  securities  which 
they  held,  and  invested  the  proceeds  in  the  loan. 

France  has  thus  avoided  a  large  export  of  specie,  but  has  permanently 
increased  her  foreign  indebtedness.  The  suspension  of  specie  payments  has 
not  in  France  had  the  same  effect  which  was  produced  by  suspension  in  this 
country,  namely,  that  of  driving  the  precious  metals  out  of  circulation.— Report 
U.  S.  Bureau  of  Statistics,  September,  1873. 


76  HAND-BOOK   OF   FINANCE. 

to  the  inquiry  as  to  what  may  be  the  amounts  of 
gold  and  silver  coin  in  the  other  countries  of  Europe, 
there  seems  almost  no  method  except  to  establish 
approximately  the  following  premises,  viz.: 

First.  The  financial  condition  of  the  people  in  each 
country,  and  their  consequent  ability  to  possess  money 
of  any  kind.  This  may  be  estimated,  perhaps,  as  well 
by  their  ability  to  pay  taxes  as  by  any  other  general 
fact  that  can  be  made  to  apply  to  all  nations ;  and  though 
the  pressure  of  taxation  undoubtedly  varies  very  much 
in  different  countries,  the  average  annual  revenue  raised 
by  the  governments  will  indicate  in  some  degree  the 
ability  of  the  people  to  have  money. 

Second.  The  extent  to  which  coin  may  have  been 
displaced  by  the  use  of  paper  money  and  suspensions  of 
specie  payments. 

Third.  The  effect  which  the  decline  in  the  price  of 
silver  may  have  had  to  cause  a  substitution  of  silver 
coins  for  gold  in  countries  where  silver  is  the  exclusive 
standard  of  values,  as  in  Austria  and  Russia. 

The  table  on  page  78  of  the  populations  and  revenue 
of  each  country  for  some  one  of  the  last  four  or  five 
years  will  aid  in  showing  the  ability  of  the  people  to 
pay  taxes,  though  of  course  there  are  qualifying  features 
in  each  case  that  will  somewhat  change  this  relative 
ability  as  presented  at  first  glance.  There  is,  however, 
a  reasonable  degree  of  correspondence  between  the 
pressure  of  taxation  in  France  in  1873  and  Austria  and 
Russia  in  1871  and  1871:.  It  is  true  that  the  two  latter 
countries  have  not  so  recently  been  engaged  in  great 
and  expensive  wars,  but  in  both  countries  the  annual 
expenditures  of  the  governments  have  largely  exceeded 
the  revenue  each  year  for  about  thirty  years,  and  the 


GOLD   AND   SILVER   COIN"   IN"   EUROPE.  77 

aggregate  of  annual  deficits  has  piled  up  a  great  debt  in 
each  case.  In  Italy  and  Spain  the  financial  affairs  of 
the  governments  have  been  in  even  worse  plight,  but 
the  government  machinery  for  collecting  taxes  has  not 
been  so  well  organized  and  the  amount  of  revenue  raised 
has  probably  been  no  greater  in  proportion  to  the  ability 
of  the  people  to  pay  than  it  has  been  in  Russia  and 
Austria.  If  we  find  that  in  Sweden,  for  instance,  where 
the  government  finances  are  in  fair  condition,  the  people 
pay  nearly  twice  as  much  revenue  per  capita  as  in  Russia, 
where  there  has  always  been  a  pressure  to  increase  the 
revenue,  we  must  conclude  that  the  ability  of  the  people 
of  Sweden  to  pay  taxes  and  possess  money  is  at  least 
double  that  of  the  people  of  Russia.  Upon  the  same 
basis  we  may  reasonably  conclude  that  if  the  amount  of 
revenue  raised  in  Great  Britain  and  France  is  about 
three  times  as  great  per  capita  as  in  Russia  and  Austria, 
the  amount  of  money  of  any  kind  per  capita  in  the  latter 
countries  is  onty  one-third  as  great  as  in  the  former. 
These  would  be  reasonable  propositions  even  if  there 
were  no  statistics  by  which  they  could  be  proven.  But 
the  definite  knowledge  of  the  amount  of  currency  in  use 
in  the  United  States  affords  facts  of  great  value  in  verify- 
ing the  proportions  of  revenue  to  money  in  all  countries. 

No  such  facts  have  been  at  the  command  of  economic 
science  until  within  the  last  few  years.  Strenuous  en- 
deavors have  been  made  in  Great  Britain  and  France  to 
estimate  the  amount  of  money  per  capita  ;  but  it  is  only 
when  corroborated  by  the  experience  of  the  United 
States  that  the  law  of  the  proportions  can  be  eliminated 
from  all  the  facts. 

The  following  table  of  population  in  each  country  and 
the  amount  of  national  revenue  per  capita  will  serve  as 


HAND-BOOK   OF   FINANCE. 


a  measure  of  the  amount  of  money  in  circulation  and  in 
banks,  per  capita  of  the  whole  population : 

POPULATION  AND   ANNUAL  REVENUE. 


United  States 

Canada  

Gt.  Britain  &Irelnd 

France 

Prussia 

Austria- Hungary. . . 

Russian  Empire 

Sweden 

Belgium 

Switzerland 

Italy 

Spain 


Population. 


42,000, 

4,000, 

31,000, 

36.000. 

24,600, 

35,912, 

82,000, 

4,297, 

5,087, 

2.669, 

26,800, 

16,835, 


000 
000 
000 
000 
000 
000 
000 
972 
000 
000 
000 
000 


1875-6 
1875-6 
1875-6 

1872 
1874 
1874 
1874 
1874 
1874 
1874 
1872 
1870 


Kevenue. 


$287,482,090 

24,205,0001 

377,000,000 

547,000,000 

167.500.000 

*200.000,000 

393,000,000 

38,707,476 

39,300,000 

7,152,704 

tl78.000,000 

113,500,000 


1875 
1874 
1870 
1873 
1874 

1871-2 
1874 
1875 
1873 
1873 
1870 

1871-2 


Revenue 
per 

Capita. 


$6  87 

6  05 

12  16 

15  19 

6  40 

5  55 
4  79 
9  00 

7  72 
2  69 

6  65 
6  73 


The  analogy  between  the  proportions  of  revenue  and 
estimated  volume  of  money  in  the  United  States,  Great 
Britain  and  France  are  very  striking.  Thus,  taking  the 
whole  amount  of  paper  money  and  coin  in  the  United 
States  in  1875  at  $850,000,000  it  gives  $20  per  capita, 
or  just  about  three  times  the  amount  of  annual  revenue 
per  capita.  In  the  United  Kingdom  of  Great  Britain 
and  Ireland  the  total  of  paper  money  and  coin  is  $765,- 
000,000,  which  gives  $24.70  per  capita,  or  a  little  more 
than  double  the  ratio  of  revenue  per  capita.  In  France 
the  total  of  paper  money  and  coin  was  equivalent  to 
$1,500,000,000,  or  815  per  capita,  or  just  three  times 
the  ratio  of  average  annual  revenue  per  capita.     Putting 

*The  official  annual  budget,  or  estimate  of  the  revenue  in  Austria,  is  made 
under  two  different  heads,  one  for  the  ordinary  expenses  of  the  empire  at  large 
and  another  for  the  separate  countries —Austria  and  Hungary.  The  amount 
given  above  is  an  estimate  made  from  both. 

t  Besides  the  S178.000.000  of  ordinary  revenue,  the  Italian  government  raised 
an  extraordinary  revenue  in  1870  of  $190,000,000  from  taxation  of  church  prop- 
erty. 


GOLD   AND    SILVEE   COIN   IN   EUROPE. 


79 


these  figures  into  the  form  of  a  table,  we  have  the  fol- 
lowing result,  viz. : 


Coin  and 

Paper 

Per  Capita 


Annual 

Revenue 

Per  Capita. 


Percentage 
of  Revenue 
to  Money. 


United  States. . . 
United  Kingdom 
France 


$20  00 
24  70 
45  00 


>  6  87 
12  16 
15  19 


34.35 
49.23 
33.53 


Thus  we  find  that  in  the  three  countries  where  the 
estimate  of  the  volume  of  paper  money  and  coin  in 
existence  is  presumed  to  be  more  nearly  correct  than  in 
any  other  countries  of  the  world,  there  is  a  remarkable 
correspondence  in  the  ratio  of  annual  revenue  to  the 
total  volume  of  money,  which  I  have  ventured  to  assume 
as  the  law  governing  the  proportion  of  revenue  to  money 
in  all  countries.*  The  average  of  the  percentage  of 
revenue  to  money  in  the  above  table  is  39,  and  in  view 

*  The  reliability  of  this  rule  for  estimating  the  amount  of  money  in  use  in 
any  country  is  strikingly  illustrated  by  the  case  of  the  United  States  for  a  series 
of  fiscal  years. 


Volume  of 

Paper  Money 

Alone. 

Total  Net 
Revenue. 

Per 
Cent. 

1866 

1867 

1868 

81,803,702,726 
1.330,414,677 
817,199.773 
750,025,987 
740,039,179 
734.244,774 
736,349,912 
738,291.749 
779,031.589 
778.176,250 
735,358,832 

$558,632,620 
490,634.010 
405,638,083 
370,943,747 
411,255,477 
382.323.944 
374,106,867 
333,738,294 
289,478,755 
288,000,000 
287,482,039 

31 
37 
49 

1869 

49 

1870 

55 

1871 

52 

1872 

50 

1873 

45 

1874 

37 

1875 

37 

1876 

39 

Average 


It 


The  foregoing  shows  that  for  a  period  of  eleven  years  the  annual  revenue 
of  the  government  has  been  an  average  ratio  of  44  per  cent  of  the  paper 
money  in  use.  But  if  now  we  estimate  an  average  of  $120,000,000  of  coin  in  use 
in  the  United  States  and  Territories  each  year,  it  makes  the  average  annual  rev- 
enue 37  per  cent  of  the  total  of  coin  and  paper  money. 


80  HAND-BOOK   OF   FINANCE. 

of  the  impossibility  of  even  approximate  statistics  of 
the  amount  of  coin  in  any  countries  but  the  United 
States,  Great  Britain  and  France,  this  seems  the  most 
satisfactory  rule  of  estimation.  There  are,  of  course, 
exceptions  to  all  rules;  but  in  the  cases  of  exception 
to  this  the  causes  are  pretty  well  known.  Switzerland, 
for  instance,  is  known  to  have  a  much  larger  percent- 
age of  money  to  revenue ;  but  the  cause  is  plainly  in 
the  fact  that  she  has  no  public  debt  of  any  consequence. 
But  in  the  case  of  nearly  all  the  remaining  countries  in 
the  table  the  exceptions  are  in  the  opposite  direction. 
They  all  have  great  public  debts.  The  pressure  of  tax- 
ation to  pay  the  interest  on  these,  as  in  Russia,  Austria, 
Italy  and  Spain,  has  resulted  in  a  revenue  larger  in 
proportion  to  the  amount  of  money  in  the  countries  than 
in  England  and  France,  until,  as  in  the  cases  of  Italy 
and  Spain,  it  has  impoverished  the  people  and,  in  the 
case  of  Spain,  bankrupted  the  government.  Therefore, 
taking  the  remainder  of  Europe  (exclusive  of  Great 
Britain,  France  and  Germany),  the  amount  of  annual 
taxation  and  revenue  is  larger  in  proportion  to  the 
amount  of  money  in  the  countries,  and  we  should  as- 
sume at  least  40  per  cent  as  the  ratio  of  the  former  to 
the  latter. 

Under  this  rule  the  total  annual  revenue  of  Austria- 
Hungary,  being  $200,000,000,  would  represent  a  total 
monetary  circulation  of  $500,000,000,  or  about  $14  per 
capita.  Of  this  amount  $300,000,000  is  paper  money, 
thus  leaving  $200,000,000  of  coin,  which  is  known  to 
be  almost  exclusively  silver  and  token  coinage.* 

Upon  the  same  basis  there  should  be  in  Russia  an 
aggregate  of  $982,000,000  of  monetary  circulating  me- 

*  See  article  on  Suspensions  of  Specie  Payments  in  all  Countries, 


GOLD   AND   SILVER   COIN   IN    EUROPE.  81 

dium.  By  reference  to  the  table  of  paper  money  it  will 
be  seen  that  the  aggregate  of  paper  money  in  Russia  in 
1873  was  equal  to  $780,000,000,  in  United  States  money, 
thus  leaving  an  aggregate  of  $200,000,000  of  coin,  which 
is  known  to  be,  as  in  Austria,  almost  exclusively  silver 
and  base  metal. 

The  total  ordinary  revenue  of  Italy,  stated  in  the 
foregoing  table  at  $178,000,000  for  1870,  if  accepted  as 
representing  40  per  cent  of  the  total  monetary  circula- 
tion of  the  kingdom,  would  indicate  the  total  of  money 
to  be  $445,000,000,  or  $16.60  per  capita.  The  total  of 
paper  money  in  Italy  in  1874  was  1,500,000,000  francs, 
equal  to  $300,000,000  in  United  States  money.  De- 
ducting this  latter  amount  from  the  whole,  it  leaves 
$145,000,000  to  be  represented  by  coin.  Silver  is  a 
legal  tender  in  any  sum  in  Italy,  and  even  if  gold  was 
not  driven  out  by  the  suspension  of  specie  payments,  the 
recent  decline  in  the  value  of  silver  would  have  the  effect 
to  leave  nothing  but  silver  and  copper  in  circulation. 

The  disorganization  of  finances  in  Spain  is  so  com- 
plete that  it  is  impossible  to  estimate  the  amount  of 
government  paper  that  has  recently  been  used  as 
money.  But  the  government  being  hopelessly  bank- 
rupt, its  paper  has  lost  all  value. 

The  countries  most  critically  examined  in  the  fore- 
going pages,  viz. :  Great  Britain,  France,  Austria,  Italy 
and  Russia,  contain  70  per  cent  of  the  population  of 
Europe,  and  the  conclusions  to  be  drawn  from  the 
premises  sustain  the  popular  opinion  that  the  wealth  of 
Europe  —  in  gold  and  silver  as  well  as  other  things  —  is 
concentrated  mainly  in  Great  Britain  and  France. 

In  view  of  all  the  foregoing  facts,  the  estimates  of  the 
total  value  of  gold  and  silver  coin  and  bullion  in  banks 


82 


HAND-BOOK    OF   FINANCE. 


and  in  circulation  in  the  respective  countries  of  Europe 
would  stand  about  as  follows,  viz.: 

GOLD,    SILVER    AND    BASE    METAL    COIN    AND    GOLD    AND    SILVER 
BULLION   IN   CIRCULATION   AND   IN   BANKS   IN   ALL  EUROPE. 


Great  Britain 

France  

Germany 

Austria 

Russia 

Italy 

Spain 

Sweden 

Belgium 

Switzerland 

All  other  States  of  Europe. 


Gold. 


$442,500,000 
650,000,000 
380,000,000 


300,000,000 


$1,872,500,000 


Silver  and  Base 
Metal. 


$80,000,000 

350.000,000 

370,000,000 

200,000,000 

250,000,000 

145,000,000 

200,000,000 

70,000.000 

38,000;000 

5,000,000 

360,000,000 


$2,060,000,000 


The  only  countries  of  Europe  not  named  in  the  above 
list  are :  Netherlands,  population,  3,674,400 ;  Luxem- 
bourg, population  197,500 ;  Norway,  population  1,741,- 
000  ;  Greece,  population  1,457,000  ;  Turkey  in  Europe, 
including  Montenegro,  Servia  and  Eoumania,  with  a 
total  population  of  15,747,000,  and  Portugal,  population 
4,249,000,  making  an  aggregate  population  of  25,600,- 
000,  not  embraced  in  the  table.  In  the  Netherlands 
there  is  great  wealth,  but  in  all  the  other  countries  great 
poverty.  If,  therefore,  we  make  an  estimate  of  $18  per 
capita  as  the  average  coin  in  circulation  and  in  banks  in 
these  countries,  it  would  give  an  aggregate  of  $460,- 
000,000.  In  the  Netherlands  and  in  Greece  silver  is 
the  standard,  and  it  would  be  a  liberal  estimate  to  say 
that  $100,000,000  of  the  whole  was  gold  coin  and  bul- 
lion in  banks  and  in  circulation.     With  these  additions 


GOLD   AND    SILVER   COIN   IN   EUROPE.  83 

we  should  have  the  total  of  each  kind  of  money  in 
Europe  about  as  follows,  viz.: 

Gold  coin  and  bullion $1,900,000,000 

Silver  and  base  metal 2,000,000,000 

Paper  money 2,300,000,000 

Grand  total $6,200,000,000 

The  figures  for  the  metallic  circulation,  and  especially 
for  the  gold,  fall  so  immensely  short  of  the  commonly 
received  estimates  of  the  amounts  in  use  as  money  in 
Europe,  that  it  is  only  after  several  careful  reviews  of 
all  the  premises  that  I  venture  to  commit  them  to 
paper;  and  though  the  rule  I  have  adopted,  of  assuming 
the  annual  revenue  of  each  country  to  be  the  measure 
of  from  38  to  40  per  cent  of  its  entire  monetary  circu- 
lation, may  not  produce  results  corresponding  to  some 
popular  notions,  it  is  at  least  logical,  and  seems  the  only 
one  available  for  application  in  all  countries. 

But  when  we  come  to  sum  up  the  whole  matter  we 
find  that  the  total  monetary  circulation  of  Europe,  in- 
cluding the  paper  money  (of  which  I  think  the  total 
volume  has  heretofore  always  been  underestimated), 
gives  for  the  300,500,000  total  population  of  Europe 
an  average  of  $21.40  per  capita,  or  $1.40  more  per 
capita  than  the  total  of  paper  and  coin  per  capita  in  the 
United  States. 

In  Austria,  Kussia  and  Italy,  with  an  aggregate  popu- 
lation of  145,000,000,  or  nearly  one  half  of  all  Europe, 
specie  payments  have  been  suspended  for  many  years, 
and  the  depreciation  of  the  legal  tender  paper  money 
would  have  a  tendency  to  drive  gold  and  silver  out  of  cir- 
culation. In  the  other  countries,  as  in  Belgium,  Sweden 
and  the  Netherlands,  where  there  has  been  no  suspension 
of  specie  payments,  but  where  silver  is  a  legal  tender  in 


84  HAXD-BOOK    OF   FINANCE. 

any  amount,  the  decline  in  the  value  of  silver  as  com- 
pared to  gold  in  the  last  year  would  have  the  effect  to 
displace  gold  with  silver.  In  Russia  and  Austria  silver 
is  the  only  standard,  and  the  only  legal  metallic  money 
of  account,  and  under  any  circumstances,  whether  specie 
payments  were  suspended  or  not,  silver  would  be  the 
only  coin  in  circulation  to  any  considerable  extent,  except 
the  token  coinage.  The  operation  of  all  these  causes 
(and  particularly  the  change  in  the  relative  values  of 
gold  and  silver  in  the  last  year)  has  been  to  drive  the 
gold  out  of  other  countries  of  Europe  and  concentrate 
it  in  Great  Britain,  France  and  Germany.  In  Germany 
this  influx  of  gold  has  gone  largely  into  general  circula- 
tion in  place  of  silver,  which  was  demonetized  under 
the  new  monetary  system  of  the  empire.  In  France  the 
monetary  circulation  being  already  very  large,  it  was 
not  wanted  in  popular  use  and  it  went  into  the  Bank  of 
France.  In  Great  Britain  it  went  partly  into  circula- 
tion, but  also  accumulated  to  a  considerable  extent  in 
the  Bank  of  England.  -  The  increase  of  specie  in  these 
banks  has,  I  think,  led  to  exaggerated  estimates  of  the 
increase  of  gold  and  silver  in  use  in  Europe  as  money, 
whereas  this  was,  to  a  large  extent,  merely  the  effect 
of  the  displacement  of  specie  in  general  circulation  by 
the  increase  of  paper  money  throughout  Europe. 

Chevalier  estimated  the  total  of  gold,  in  its  various 
forms  of  coin  bullion  and  personal  ornaments,  in  the 
world,  in  1848,  at  about  $2,830,000,000,  and  various 
other  accepted  authorities  estimated  the  amount  of  gold 

*  The  effect  of  the  movement  of  specie  from  all  other  parts  of  Europe  to 
Germany.  France  and  Great  Britain,  has,  I  think,  contributed  more  than  any- 
thing else  to  increase  the  specie  reserve  of  the  national  banks  of  these  three 
countries.  This  increase  of  specie  in  the  banks  of  England,  France  and  Ger- 
many, which  has  been  ascribed  to  the  increased  production  of  gold  and  silver, 


GOLD    AND    SILVER    COIN"    IN    EUROPE. 


85 


coin  and  bullion  in  Europe,  in  1847,  at  about  $1,250,- 
000,000.  Albert  Gallatin,  after  a  careful  consideration 
of  the  production  and  consumption,  estimated  the  total  of 
gold  coin,  bullion  and  ornaments  in  the  world,  in  1834,  at 
only  $1,800,000,000.  In  May,  1876,  also,  before  a  select 
committee  of  parliament,  Mr.  Seyd  estimated  the  total 
stock  of  gold  in  circulation  in  the  current  year  at  the 
enormous  figure  of  $3,750,000,000,  of  which  he  appor- 

has  been  greatest  since  the  production  of  gold  has  diminished,  as  will  be  seen 
by  the  following  table  of  the  amounts  of  specie  in  each  of  the  three  great 
banks  at  different  periods  in  the  eighteen  months  to  July,  1876,  (the  amounts  are 
given  in  their  equivalents  in  United  States  money). 


Bank  of 
France. 

Bank  of 
Germany. 

Bank  of 
England. 

Dec.  26, 1874 

$266,200,000 
333,700,000 

$ 

$105,120,125 
113,138,775 

Dec.  24, 1895 

Jan.  31,  1876 

112,780,000 
115,095,000 

Feb.  7 

Feb.  10 

347,153,000 

Feb.  15 

116,335,000 

Feb.  17 

350,853,000 

Feb.  23 

119,115,000 

Feb.  24 

355,348,000 

Feb.  29 

121,250,000 

March  2 

360,602,000 

116,398,100 

March  7 

121,250,000 

March  9 

366,144,000 

March  14 

121,250,000 

March  16 

369,130.000 
374,900,000 
377,126,000 

378,367,666 

March  23 

126,745,000 

March  30 

'125,664,946 

March  31 

124,650,600 

April  6 

April  7 

123,615,000 

April  13 

378,883,000 
381,775,666 
'385,588,666 
390,697,666 

April  15 

126,525,000 

April  20 

April  22 

128,990,000 

April  27 

April  29 

May  4 

130,355,000 

'131,294,455 

May  9 

133,626,000 

May  11 

393.759,000 

-May  22 

139,555,000 

June  1 

402,351,000 

138,005,000 

June  7 

140,228,000 
'140,945,666 

June  15 

406.862,000 

June  15 

June  22... 

409,660,000 
412,363,666 

June  22 

137,965,000 

'i32,iio,ooo 

June  29 

July  18 

150,953,150 

July  20. . . . 

415,210,000 

86  HA^D-BOOK   OF   FI]STA>sTCE. 

tioned  $1,300,000,000  to  France,  $650,000,000  to  Great 
Britain  and  150,000,000  to  the  United  States.  Mr. 
Seyd's  estimate  of  the  gold  in  the  United  States  is 
based  on  the  estimate  of  the  director  of  the  United 
States  Mint  for  June  30,  1875.  which  was  $167,000,000 
for  the  total  amount  of  gold  and  silver  coin  and  bullion 
in  the  United  States  at  that  date;  but  even  in  this 
estimate  the  director  of  the  Mint  stated  that  no  deduc- 
tion had  been  made  for  the  amount  of  gold  consumed 
in  the  arts  for  two  years.  This  estimate  also  allowed 
$10,000,000  of  actual  gold  coin  and  bullion  as  being 
held  by  the  national  banks,  which  is  unquestionably  too 
large  an  estimate.  It  is  therefore  apparent  that  Mr. 
Seyd's  estimate  of  $150,000,000  of  gold  in  the  United 
States  is  about  $50,000,000  too  large,  and  I  think  his 
allowances  to  Great  Britain  and  France  are  overesti- 
mates in  about  the  same  ratio.  Seyd  estimated  the 
stock  of  gold  coin  alone  in  the  commercial  world,  in 
1872,  at  $2,600,000,000,  and  before  1848  at  $2,000,- 
000,000.  Ruggles  estimated  the  world's  stock  of  gold 
coin  in  1867,  at  $2,600,000,000.  These  estimates  seem  to 
be  the  merest  conjectures,  without  any  thorough  investi- 
gation, and  the  method  by  which  Mr.  Seyd  and  others 
have  arrived  at  their  present  estimates  of  the  amount 
of  gold  in  circulation  is  to  add  75  per  cent  of  the 
presumed  production  of  gold  in  the  world  since  the 
dates  mentioned.  Thus  we  have  Gallatin's  estimate  of 
the  total  of  gold  coin,  bullion  and  ornaments,  in  1834,  at 
$1,800,000,000.  Chevalier's  of  $2,830,000,000,  in  1848, 
and  Seyd's  of  $3,750,000,000  of  gold  coin  alone  in 
1876.  If  Gallatin  was  right  Chevalier  was  wrong,  and 
if  Chevalier  was  right  Seyd  is  wrong. 


GOLD   AND   SILVER   COIN   IN   EUROPE.  87 

All  these  estimates  are,  however,  open  to  the  criticism 
that,  first,  they  were  made  without  any  investigation  of 
the  financial  condition  of  different  countries  of  the 
world,  or  even  of  Europe ;  second,  that  they  were  not 
made  upon  the  basis  of  any  rule  of  wealth  in  each  of 
the  countries ;  that  each  later  estimate  has  been  made 
upon  the  presumption  that  the  earlier  ones  were  correct 
and  that  the  only  thing  to  be  done  was  to  add  the  75 
per  cent  of  the  estimated  product  of  the  mines.  It  is 
by  this  method  of  conjecture  piled  upon  conjecture  that 
men  have  contrived  to  arrive  at  the  estimate  of  $3,750,- 
000,000  of  gold  in  use  as  money  in  the  world  at  the 
present  time.  But  it  is  in  vain  that  they  attempt  to 
apportion  it  out  to  the  respective  countries, —  the  sum  is 
too  large  to  admit  of  apportionment. 

If  in  the  inquiry  as  to  where  this  presumed  immense 
sum  of  gold  used  as  money  is  distributed  we  turn  to 
our  own  part  of  the  world,  we  find  on  the  continent  of 
North  America  a  total  population  of  about  56,000,000 
in  1875.  Of  this  total  there  was  in  the  United  States 
say  42,000,000,  in  Canada  4,000,000  and  in  Mexico 
9,000,000.  We  know  that  the  total  of  gold  coin  and 
gold  bullion  in  the  United  States  at  the  close  of  that 
year  did  not  much  exceed  $100,000,000. 

The  population  of  Canada,  in  1875,  was  estimated  at 
a  little  over  4,000,000.  The  total  revenue  raised  in 
1874  was  $24,205,000,  or  at  the  rate  of  $6.05  per  capita. 
Assuming  this  to  be  in  accordance  with  the  rules  applied 
to  other  countries,  viz.,  33|  per  cent  of  the  money  in 
circulation  and  in  banks,  it  would  give  an  aggregate 
of  $72,600,000  of  all  kinds  of  money,  or  at  the  rate 
of  $18.15  per  capita.  The  circulation  of  the  Canadian 
banks  on  December  31,  1875,  was  $25,412,321,  leaving 


88  HAND-BOOK    OF   FINANCE. 

a  presumed  aggregate  of  $47,200,000  in  all  sorts  of 
coin. 

There  is  a  mint  in  each  of  the  eight  States  of  Mex- 
ico, and  the  aggregate  coinage  of  these  in  the  fiscal  year 
1872-3  was  §20,374,554,  of  which  §19,686,434  was 
silver  coins,  leaving  only  $668,120  of  gold.  The  total 
coinage  of  1869-70  was  $20,677,021,  with  the  same 
ratio  of  gold  and  silver,  and  in  that  year  the  total 
export  of  coin  from  Mexico  was  $17,479,014.  Com- 
paring these  facts  with  similar  ones  for  the  various 
States  of  Europe,  we  should  not  exj)ect  to  find  in  the 
whole  of  Mexico  an  aggregate  of  more  than  $40,000,000 
of  all  kinds  of  coin,  of  which  at  least  $35,000,000 
would  be  silver. 

According  to  the  latest  statistics  the  total  population 
of  South  America  and  the  West  Indies  aggregates  about 
29,000,000,  of  which  10,000,000  are  in  Brazil,  4,000,000 
in  the  West  Indies,  and  nearly  5,000,000  in  Peru. 

Of  the  10,000,000  population  of  Brazil  nearly  or 
about  one  third  are  either  savage  nomadic  tribes  or 
persons  recently  manumitted  from  slavery  under  the 
act  for  gradual  emancipation  passed  in  1871,  and  the 
proportion  of  the  population  using  any  kind  of  money 
to  any  considerable  extent  is  not  above  7,000,000  or 
8,000,000.  But  the  fact  in  connection  with  Brazil  most 
pertinent  to  our  present  inquiry  is  that  coin  of  any  kind 
has  for  many  years  been  almost  entirely  banished  by 
the  use  of  inconvertible  paper  money.  Shortly  after 
the  first  great  increase  of  paper  money  in  1856-7  the 
entire  monetary  circulation  of  the  empire  was  made  the 
subject  of  careful  investigation,  the  result  of  which  was 
the  following  statement  of  all  kinds  of  money  in  circu- 
lation in  the  empire  at  the  close  of  1857,  viz.: 


GOLD   AND   SILVER   COIN   IN   EUROPE.  89 

Government  notes 43,000,000  millreis.* 

Notes  of  Bank  of  Brazil   49,687,450 

Gold,  silver  and  copper  coins  5,000,000 

97,667,450  miUreis. 

In  1858  the  Bank  of  Brazil  made  an  ineffectual 
attempt  to  resume  specie  payments,  and  by  1865  the 
total  of  bank  and  government  notes  was  reduced  to  an 
aggregate  of  75,000,000  millreis.  But  in  consequence  of 
the  Paraguayan  war,  which  ended  in  1870,  the  Brazilian 
government  increased  its  issues  of  inconvertible  paper 
money  122,000,000  millreis,  and  in  1875  the  monetary 
circulation  of  the  empire  was  stated  as  follows,  viz.: 

Government  notes 159,000,000  millreis. 

Notes  of  the  Banks  of  Brazil,  Maranham,  Per- 

nambuco  and  Bahia 38,000,000 

Gold,  silver  and  copper,  estimated 7,000,000 

Total 204,000,000  millreis. 

The  total  paper  money  circulation  of  Brazil  was 
therefore  equal  to  $52,204,230  in  United  States  money 
in  1857,  and  increased  to  $106,380,000  by  1871,  while 
the  total  coin  circulation  amounted  to  the  insignificant 
sums  of  $2,700,000  in  1857  and  $3,500,000  in  1871,  at 
about  which  it  has  remained  since. 

The  State  of  Paraguay  was  rendered  totally  bankrupt 
by  the  war  with  Brazil,  and  there  can  be  but  little  coin 
of  any  kind  in  circulation. 

The  Argentine  Republic  resorted  in  1866  to  the  issue 
of  government  treasury  notes  in  denominations  of  $5, 
$10,  $20,  $50  and  $100,  and  these  have  largely  dis- 
placed coin  of  any  kind. 

A  *  This  word  is  the  plural  of  real,  and  one  real  in  Brazilian  money  is  about 
half  a  mill.  In  Portuguese  coin,  however,  it  is  about  one  mill.  Tbe  modern 
Brazilian  milreis  (written  1$000,  one  thousand  reis)  is  equal  to  b4%  cents  in  gold. 
The  Portuguese  millreis  is  worth  about  double  that  of  Brazil. 

4* 


90  HAND-BOOK    OF   FINANCE. 

In  the  republic  of  Peru  the  revenue  of  $23,499,653, 
collected  from  its  population  of  4,500,000  in  1873 
($5.22  per  capita),  would  indicate  an  aggregate  mone- 
tary circulation  of  about  $76,000,000  to  $80,000,000 
(from  $16  to  $18  per  capita);  but  there  are  banks  of 
issue  and  also  some  issues  of  government  money.  The 
standard  of  values  is  exclusively  silver,  and  whatever 
coin  there  is  would  be  almost  entirely  of  silver. 

In  the  republic  of  Chili  the  revenue  in  1871  was 
$11,788,500,  or  $5.89  per  capita  of  the  2,000,000  of 
population,  thus  indicating  an  aggregate  monetary  cir- 
culation of  from  $18  to  $20  per  capita.  Gold  is  the 
exclusive  standard  in  Chili,  and  what  circulation  is  not 
of  paper  or  subsidiary  coin  would  probably  be  of  gold. 

The  revenue  of  $3,400,000  collected  in  the  republic 
of  Colombia  for  the  year  1873  would  indicate  an  aggre- 
gate monetary  circulation  of  probably  $12,000,000  to 
$15,000,000,  but  here  the  exclusive  standard  of  values 
is  silver,  and  whatever  of  the  monetary  circulation  was 
not  either  paper  or  subsidiary  coins  would  be  almost 
exclusively  of  silver. 

We  have  thus  glanced  at  the  probable  volume  of  money 
and  the  materials  of  which  it  is  presumably  composed 
in  the  six  principal  states  of  South  America,  the  popu- 
lation in  these  comprising  18,000,000  of  the  25,500,000 
on  the  whole  continent;  and  the  conclusion  seems 
unavoidable  that  there  is  not  above  $60,000,000  of  gold 
in  use  as  money  on  the  whole  continent  of  South 
America.  There  remains  yet  but  the  West  Indies, 
with  an  aggregate  population  of  4,200,000,  among  whom 
there  may  be  $15,000,000  of  gold  in  circulation,  thus 
making  say  $75,000,000  for  South  America  and  the 
West  Indies.     If  now  we  add  the  very  liberal  estimate 


GOLD   AND   SILVER    COIN    IN   EUROPE.  91 

of  $175,000,000  for  the  whole  of  North  America,  we 
have  a  grand  total  of  $250,000,000,  which,  added  to  the 
$1,872,500,000  estimated  in  the  tables  for  Europe,  gives 
a  grand  total  of  say  $2,047,000,000  as  the  amount  of 
gold  coin  and  bullion  in  use  as  money  in  Europe  and 
North  and  South  America.  Where  then  shall  we  look 
for  the  other  $1,700,000,000  presumed  by  some  to  exist 
in  the  world  as  coin  or  bullion  at  the  present  time,  or 
even  for  the  remaining  $600,000,000  estimated  by  Seyd 
to  exist  in  1872,  and  by  Ruggles  in  1867?  If  statistics 
are  worth  anything  at  all  ihej  prove  beyond  a  doubt 
that  no  such  sum  .of  gold  coin  or  bullion  as  even  the 
smaller  of  these  exists  in  Asia  as  money,  though  a  much 
larger  amount  probably  exists  as  ornaments.  In  India 
and  China,  whose  populations  compose  80  per  cent  of 
the  entire  798,000,000  of  population  in  Asia,  silver  is 
the  exclusive  standard  of  values,  and  gold  does  not 
circulate  to  any  great  extent  as  money.  In  Japan,  the 
next  largest  state  of  Asia,  gold  is  the  exclusive  standard 
of  values,  but  Japan  also  has  a  system  of  national 
banks  modeled  after  that  of  the  United  States,  and  a 
large  part  of  the  circulating  medium  is  paper.  The 
coin  circulation  is  also  composed  largely  of  silver  and 
copper  coins. 

Where  then  shall  we  look  for  the  remaining  $1,700,- 
000,000  of  gold  presumed  to  exist  in  the  world  as 
money  ere  wre  are  forced  to  the  conclusion  that  it  is,  to 
a  great  extent,  only  a  myth  ? 

For  all  practical  purposes,  as  a  stock  of  gold  coin 
upon  which  the  commercial  world  may  rely  as  a  circu- 
lating medium  or  a  reserve  for  the  redemption  of  paper 
mone}7,  or  for  the  payment  of  interest  or  principal  of 
national  or  corporate  debts,  the  entire  amount   is   in 


92  HAXD-BOOK    OF    FINANCE. 

Europe  and  the  United  States.  The  total  of  what  there 
is  in  South  America  is  too  small  to  be  of  any  impor- 
tance. As  for  what  may  have  been  produced  in  Asia  or 
exported  there  in  the  last  quarter  of  a  century,  it  has 
been  to  a  large  extent,  if  not  wholly,  absorbed  in  the 
arts  and  in  the  manufacture  of  the  personal  ornaments 
of  which  the  inhabitants  of  India  and  more  particularly 
the  semi-barbaric  races  of  Asia  Minor  wear  such  a  pro- 
fusion—  a  characteristic  which  has  in  all  ages  imparted 
the  glitter  of  romance  to  all  oriental  countries.* 

*  A  whole  volume  might  be  filled  with  instances  showing  with  how  much 
greater  profusion  even  the  masses  of  the  people  in  India,  Afghanistan  and  Persia 
use  the  precious  metals  as  personal  ornaments  than  in  the  more  highly  civilized 
countries.  Indeed  the  highest  type  of  civilized  man  has  almost  abandoned  per- 
sonal adornment  with  gold  as  a  relic  of  barbarism. 

In  the  account  of  the  embassy  of  Lord  Mountsiuart  Elphinstone  from  the 
British  Government  of  India  to  the  King  of  Cabul  in  1808,  he  describes  the 
ornaments  of  the  common  people  of  Afghanistan  as  exhibiting  this  semi-civilized 
characteristic.  "  The  ornaments  of  the  women  are  strings  of  Venetian  sequins 
worn  round  their  heads,  and  chains  of  gold  or  silver,  which  are  hooked  up  over 
the  forehead.  Ear-rings  and  rings  on  the  fingers  are  also  worn,  as  are  pendants 
in  the  middle  cartilages  of  the  nose,  which  was  formerly  the  custom  in  Persia, 
and  still  is  in  India  and  Arabia." 

In  an  enumeration  of  the  trades  and  occupations  of  the  city  of  Cabul,  Lord 
Elphinstone  begins  his  list  of  seventy  trades  with  "jewelers  and  goldsmiths," 
not  as  the  most  numerous,  but  as  the  most  important. 

It  will  perhaps  be  said  that  this  was  the  condition  of  things  seventy  years  ago, 
and  that  in  the  progress  of  the  age  all  this  has  been  changed.  But  the  following 
synopsis  of  the  testimony  of  Mr.  J.  T.  Mackenzie,  given  in  May,  1876,  before  a 
British  parliamentary  committee  appointed  to  inquire  into  the  causes  of  the 
decline  in  value  of  silver,  will  show  that  the  customs  of  the  people  of  India,  and 
in  all  probability  of  those  of  Afghanistan  and  all  Asia  Minor,  in  the  lavish  use  of 
gold  and  silver  as  personal  ornaments,  have  not  changed. 

Mr.  J.  T.  Mackenzie,  of  Kintail,  said  he  was,  when  in  India,  a  proprietor 
and  merchant,  and  had  been  a  merchant  in  Great  Britain  in  the  India  trade. 
As  a  zemindar,  or  landowner,  he  had  had  considerable  experience  on  this 
subject  in  Bengal.  In  every  village  there  were  a  number  of  agents  who  acted 
as  bankers  for  the  farmers.  Practically,  a  very  small  amount  of  silver 
passed  in  the  transactions.  The  retail  business  in  the  villages  was  transacted 
by  means  of  cowries,  of  which  200  were  equivalent  to  1  pice.  A  large  quantity 
of  the  silver  coined  in  India  had  been  used  for  purposes  of  ornament.  There 
was  a  silversmith  in  every  village,  who  took  his  tools  to  the  house  of  the  man 
who  wished  the  ornaments  made.  Among  the  peasantry  the  business  was  <o 
small  that  gold  did  not  enter  into  the  settlement  of  the  transactions.    If  gold 


GOLD   AND    SILVER    COIN    IN    EUROPE.  93 

Whatever  gold  there  may  be  in  either  Asia  or  Africa 
is  practically  almost  as  unavailable  as  any  source  of 
supply  to  Europe  and  the  United  States,  as  if  it  had  not 
yet  been  dug  out  of  the  mines. 

But  there  is  another  source  of  error  in  the  commonly 
received  estimates  of  the  stock  of  gold  and  silver  money 

was  procurable,  probably  it  would  also  be  turned  into  ornaments,  as  a  gold 
ornament  enhanced  a  man's  importance.  As  a  planter,  witness  received  remit- 
tances of  silver  every  month  from  Calcutta.  If  the  amount  received  as  rents 
had  not  been  supplemented  by  remittances  from  the  mint,  the  price  of  silver 
would  have  decreased  and  the  value  of  commodities  would  have  increased.  In 
many  districts  the  circulation  was  still  totally  inadequate  to  the  wants  of  the 
people.  The  public  works  had  not  greatly  affected  the  circulation.  The  only 
large  amounts  introduced  in  this  way  were  in  connection  with  the  railways,  but 
of  the  cost  of  the  railways  only  40  per  cent  was  expended  in  India,  and  60  per 
cent  in  England.  The  existing  coinage,  when  introduced  in  1835,  was  received 
with  universal  distrust,  as  the  natives  were  extremely  cautious  in  respect  to  any 
changes  in  the  coinage.  He  believed  but  a  small  amount  of  silver  left  India  for 
the  interior  of  Asia,  inasmuch  as  such  a  movement  depended  upon  the  excess  of 
purchases  over  sales.  He  had  heard  the  amount  estimated  at  5  per  cent  of  the 
annual  importation  of  silver.  The  balance  of  trade  between  India  and  Europe 
had  been  nearly  always  in  favor  of  India.  From  1834  to  1838  the  export  trade 
averaged  £10,000,000  sterling  a  year,  and  from  1854  to  1858  it  averaged  £22,750.000; 
but  from  1865  to  1874  the  average  increased  to  £56,000,000  per  annum.  The  excess 
of  imports  over  exports  of  bullion  was  £1,750,000  per  annum  from  1834  to  1838, 
£8,625,000  from  1854  to  1858,  and  £11,250,000  from  1865  to  1874.  For  the  first  five 
years,  1865-9,  the  average  was  £16,000,000;  and  for  the  last  five  years,  1870-4, 
£6,500,000,  or  an  annual  decrease  of  £9,500,000.  The  exports  from  India  between 
the  years  1865  and  1869  amounted  to  £279,000,000;  from  1871  to  1874,  £281.000.000, 
showing  an  increase  of  £2.00O,O('O.  The  imports  into  India  from  1865  to  1869  were 
£158,000,000,  and  from  1871  to  1874,  £161,000,000,  an  increase  of  £3,000,000.  The 
amount  of  bullion  imported  into  India  from  1865  to  1869  was  £79,000.000,  and 
from  1871  to  1874,  £33,000,000,  showing  a  decrease  of  £46,000.000;  and  the  home 
requirements  had  increased  between  the  two  periods  just  named  from  £37,000.000 
to  £52.000,000,  showing  an  increase  of  £15,000.000.  The  difference  between  the 
exports  and  imports  for  the  ten  years  1865-74  showed  an  excess  of  exports  from 
India  amounting  to  £240,000,000.  The  excess  of  treasure  imports  over  exports 
in  the  same  ten  years  was  £112,000,000,  and  the  home  requirements  were 
£89,000,000;  and  this  total  of  £201,000,000  deducted  from  the  £240.000,000  named 
above  showed  a  difference  in  the  adjustment  of  £39,000,000.  The  rapid  increase 
in  the  home  requirements  was  shown,  the  witness  said,  by  the  fact  that  prior  to 
1858  (when  the  Crown  took  over  the  government  of  India)  they  were  about 
£4,500,000  yearly,  while  last  year  the  amount  was  £10,000,000.  exclusive  of 
the  £4,500,000  interest  on  the  railway  loans,  or  a  total  of  £15,000,000.  In  other 
words,  in  the  last  five  years  the  home  requirements  were  £25,000,000  more  than 
in  the  preceding  five  years. 


94  HAND-BOOK    OF   FINANCE. 

in  the  commercial  world,  viz.,  the  assumption  that 
previous  estimates  were  correct.  I  have  shown  that  the 
estimate  made  in  1868-69  of  the  amounts  of  gold  and 
silver  coin  in  Germany  were  made  upon  premises  that 
were  worse  than  worthless.  They  were  made  from 
statements  of  the  coinage  of  nine  different  states  of  Ger- 
many, but  there  was  no  correspondence  whatever  in  the 
periods ;  they  varied  from  33  to  103  years,  and  no  allow- 
ance was  made  for  the  recoinage  of  the  coins  of  other 
states,  so  that  the  same  metal  may  have  been  coined 
three  or  four  times  by  different  governments  of  Europe; 
neither  was  any  allowance  made  for  the  import  or 
export  of  specie.  Mr.  Ernest  Seyd,  in  his  estimate  of 
$3,750,000,000  of  gold  in  circulation  in  the  commercial 
world  at  present,  arrives  at  it  by  assuming  that  there 
was  §2,000,000,000  in  circulation  before  1848,  and  that 
up  to  1875  $1,750,000,000  had  been  added;  and  yet 
there  is  not  the  slightest  ground  for  the  assumption  of 
$2,000,000,000  in  circulation  before  1848  except  conjec- 
ture. Indeed,  so  much  do  these  authorities  differ  in 
their  guessing  that  we  find  even  the  more  moderate 
ones  differing  by  amounts  that  make  the  whole  matter 
seem  ridiculous.  Thus  Professor  Jevons  estimated  the 
amount  of  coin  in  the  United  Kingdom,  in  1868,  at 
£94,000,000,  while  in  McCullocNs  Commercial  Dic- 
tionary, in  the  article  on  Coins,  page  332,  we  find  the 
following  in  regard  to  coin  in  Great  Britain,  viz.: 

"  On  the  whole,  however,  we  shall  not  be  far  wrong 
if  we  estimate  the  stock  of  coin  at  present  (1868)  in 
possession  of  the  public  and  of  the  different  joint  stock 
banks  (exclusive  of  Bank  of  England)  at  £30,000,000." 

The  coin  and  bullion  in  the  Bank  of  England  at  the 
time   referred  to   by  McCulloch   was   probably  about 


GOLD   AXD    SILVER    COIX    IX    EUROPE. 


95 


£15,000,000,  thus  making  an  aggregate  of  £45,000,000 
against  Professor  Jevons'  £94,000,000.  There  is  reason 
to  think  that  Professor  Jevons'  estimate  is  much  the 
nearest  to  correct,  though  he  acknowledged  at  the  time 
of  the  estimate  that  the  amount  of  gold  coin  might  not 
be  above  £70,000,000,  instead  of  £80,000,000,  which 
latter  estimate  I  have  used  in  the  table  of  coin  in  the 
United  Kingdom.  These  facts  serve  to  show  how 
unsubstantial  is  the  foundation  for  the  estimate  of 
§2,000,000,000  in  circulation  in  the  commercial  world 
before  184S.  It  is,  of  course,  probable  that  in  my  own 
estimates  of  the  coin  and  paper  money  in  different  coun- 
tries of  Europe  and  America,  based  largely  on  the 
ability  of  the  people  to  hold  or  have  money,  I  have 
made  some  erroneous  estimates,  but  none.  I  think, 
which  would  change  the  total  amount  of  gold,  silver  or 
paper  money  in  either  Europe  or  America  over  15  per 
cent.  As  regards  Asia  and  Africa,  there  is  absolutely 
nothing  to  assist  the  statistician  —  it  is  all  conjecture. 
TVith  these  reservations  I  should  state  the  amount  of 
each  kind  of  money  in  the  different  quarters  of  the 
globe  about  as  follows  in  millions  of  dollars  of  United 
States  monev : 


Gold. 

Silver    1 
and  Base    Paper. 
Metal.* 

Europe 

1,900 

175 

75 

300 

250 

2  000         °  ^nfl 

North  America 

100 

250 

4.000 

350 

780 

South  America 

125 

Asia 

Africa 

2,700 

0.700 

*  The  proportion  of  subsidiary  silver  and  base  metal  coins  is  probably  one- 
tenth  of  the  amount  under  the  head  of  silver  and  base  metal. 


96  HAND-BOOK   OF   FINANCE. 

The  largest  amount  in  the  foregoing  table  is  the 
$4,000,000,000  set  down  as  an  estimate  of  the  aggre- 
gate of  silver  and  base  metal  coins,  bars,  ingots,  and 
even  ornaments,  used  as  mediums  of  exchange  in 
Asia.  Unfortunately  for  economic  science  this  largest 
amount  is  the  very  one  about  which  the  least  is  known, 
and  I  have  arrived  at  the  above  estimate  only  upon  the 
following  hypothesis,  viz. : 

The  total  production  of  silver  in  the  world  in  the  last 
one  hundred  years  has,  according  to  the  best  informa- 
tion attainable,  been  about  $5,000,000,000.  The  value 
of  silver  consumed  in  the  arts  is  very  small  compared 
to  the  value  of  gold  consumed  (in  the  last  quarter  of  a 
century  it  has  not  been  more  than  one  fifth  as  much 
per  annum).  If,  therefore,  we  assume  that  $1,000,- 
000,000  of  silver  was  consumed  in  the  arts  in  Europe 
and  America  in  the  last  hundred  years,  it  would  leave 
$4,000,000,000  for  other  purposes.  The  aggregate  of 
silver  coin  in  Europe  has  probably  increased  $500,000,- 
000  in  a  hundred  years,  thus  leaving,  say  $3,500,000,000 
for  distribution  to  the  rest  of  the  world.  Of  this  latter 
amount  probably  not  less  than  $3,000,000,000  has  gone 
to  Asia,  and  if  we  estimate  only  $1,000,000,000  of  silver 
in  use  as  a  medium  of  exchange  in  Asia  one  hundred 
years  ago,  it  would  give  the  aggregate  of  $4,000,000,000 
estimated  in  the  table.  It  is  probable  that  the  amount 
in  use  there  at  that  period  was  very  much  larger  than 
$1,000,000,000,  but  in  semi-barbaric  countries  a  much 
larger  estimate  must  be  made  for  loss  by  abrasion  of  coins 
and  for  loss  in  wars  and  by  casualties ;  and  in  view  of 
these  features  the  amount  of  silver  in  use  by  the  nearly 
800,000,000  of  people  in  Asia  cannot  be  estimated  below 
$4,000,000,000,  and  is  probably  larger  than  that, 


THE  ERA  OF  GOLD. 


IT  will  be  seen  that  at  the  close  of  the  preceding  arti- 
cle the  total  stock  of  gold,  silver  and  base  metal  coin- 
in  the  world  is  estimated  at  $9,400,000,000.  Deduct- 
ing from  this,  say,  $400,000,000  for  coins  composed 
wholly  of  other  metals  than  gold  and  silver,  and  we 
have  a  total  of  $9,000,000,000,  of  which,  say,  $6,300,- 
000,000  are  silver,  and  $2,700,000,000  are  gold.  This 
estimate,  it  must  be  remembered,  has  been  arrived  at  by 
a  totally  different  method  from  any  ever  used  before, 
and  without  the  slightest  thought  of  making  the  result 
correspond  with  any  of  the  numerous  estimates  of  the 
stock  of  coin  made  by  the  usual  method  of  adding  the 
production  of  the  mines  (less  the  amount  presumed  to 
be  used  in  the  arts)  to  some  estimated  amount  presumed 
to  have  been  in  existence  at  some  previous  period. 

But  as  the  increase  or  decrease  of  the  annual  produc- 
tion of  gold  and  silver  have  an  important  bearing  on 
finances  and  prices  generally,  we  may  now  proceed  to  the 
questions  of  the  production,  consumption  and  remaining 
stock  of  the  precious  metals  from  the  beginning  of  the 
present  century  down  to  1875. 

Singularly  enough,  there  seems  to  be  much  more  har- 
mony among  the  acknowledged  authorities  in  regard  to 
the  annual  production  of  gold  in  the  remotest  part  of 
the  period  in  question  than  there  is  with  reference  to 
the  last  fifty  years,  or  even  twenty-five  years. 
5 


98  HAND-BOOK   OF   FINANCE. 

Birkmyre  estimated  the  amount  of  pure  gold  pro- 
duced in  America,  Europe  and  Asia  (exclusive  of  China 
and  Japan)  in  1801  at  $13,060,000. 

Professor  W.  P.  Blake,  one  of  the  United  States  com- 
missioners to  the  Paris  Exposition  in  1867,  made  an 
elaborate  and  very  valuable  report  on  the  precious  met- 
als, in  which,  after  reviewing  the  essays  of  Chevalier, 
Humboldt,  Jacob,  Danson  and  others,  he  says  (page  207): 
"  It  will  thus  be  seen  that  all  these  authorities  concur  in 
estimating  the  annual  product  of  gold  at  the  commence- 
ment of  the  present  century  at  about  $13,000,000  per 
annum,  in  round  numbers." 

Mr.  R.  W.  Raymond,  United  States  Commissioner  of 
Mining  Statistics,  in  his  report  for  1875,  estimates 
(though  without  citing  any  previous  authority)  the  pro- 
duct of  gold  (pages  477,  478)  at  the  beginning  of  the 
present  century  at  $15,000,000  per  annum,  and  the 
product  of  silver  at  $40,000,000  per  annum. 

The  entire  gold  product  of  the  world  was  constant  at 
about  this  average  annual  rate  of  $13,000,000  to  $14,- 
000,000  per  year  until  the  development  of  the  Russian 
and  Siberian  mines,  about  1825.  From  an  annual  pro- 
duct of  less  than  84,000,000,  from  the  Russian  and  Sibe- 
rian mines,  between  1825  and  1830,  there  was  an  increase 
in  the  amount  to  about  $15,000,000  annually  between 
1840  and  1850.  This,  together  with  some  revival  of  the 
gold  product  of  South  America,  contributed  to  increase 
the  total  annual  gold  product  of  the  world  to  about  $30,- 
000,000  in  1846,  and  $93,000,000  in  1850.*  But  now 
we  come  to  the  period  in  which  it  is  well  known  there 
was  an  increase  in  the  production  of  gold  so  vast  as  to  well 

*  The  last  two  amounts  are  the  estimates  of  Birkmyre,  who  made  a  table 
(reproduced  in  Blake's  Report,  page  358)  of  the  gold  and  silver  product  of  all 


THE   ERA    OF   GOLD. 


99 


warrant  the  title  of  the  golden  era  of  the  world.  The 
product  of  $93,000,000  per  annum  in  1850  shows  the  first 
effects  of  the  discovery  of  gold  in  California  in  1848. 
While  the  supplies  from  these  new  mines  were  increasing 
a  gold-hunting  fever  prevailed  all  over  the  world,  result- 
ing in  the  discoveries  in  Australia  in  1852.  In  1853 
the  product  of  gold  from  the  Australian  mines  alone 
was  $60,000,000,  or  double  the  product  of  the  whole 
world  six  years  before,  and  nearly  ^.ve  times  the  annual 
product  of  the  world  for  many  years  prior  to  1830. 
"  The  annual  product  of  gold,"  says  Blake,  "  continued 
to  increase  until  1853,  when  it  reached  its  maximum  of 
$193,500,000.  From  that  to  the  present  time  (1867)  it 
has  been  decreasing."  *  The  amount  of  gold  produced 
in  the  first  twenty  years  of  this  era  was  probably  as 
great  as  the  whole  product  of  the  preceding  century. 
A  table  made  by  Mr.  Newmareh,f  in  response  to  an 

countries  in  the  world,  exclusive  of  China  and  Japan,  for  those  years,  with  the 
following  results  (omitting 00,000  in  each  amount): 


1846. 

1850. 

Gold. 

Silver. 

Gold. 

Silver. 

North  aud  South  America 

6,5 
22,5 

26,0 
6,0 

66.5 
26,5 

36,0 

75 

Totals,  in  millions  of  dollars 

29,0 

32,0 

93,0 

43  5 

*  See  Blake's  Report,  page  211. 


t  The  table  prepared  by  Mr.  Newmarch  presented  the  following  results: 
Total  average  annual  product  of  gold  and  silver  in  the  fifteen  years  from 
1849  to  1863,  inclusive: 


1849  to  1851,  three  years. 
1852  to  1856,  five  years. . . 
1857  to  1859,  three  years. 
1860  to  1863,  four  years. 


Averase 


1119.000.000 

193.500.000 
182.500.000 
167,500,000 


Total. 


S";.")T.OOO,000 
967,500,000 

347.500.000 

670  500.000 

$2,342,500,000 


In  the  same  table  Mr.  Newmarch  estimated  the  product  of  silver  for  the  same 
fifteen  years  at  £251,000,000,  or  an  average  of  $83,500,000  per  annum. 


100  HAND-BOOK    OF    FINANCE. 

inquiry  of  a  French  government  commission,  estimates 
the  product  of  gold,  in  the  fifteen  years  from  1849  to 
1863,  inclusive,  at  an  aggregate  of  §2,342,500,000,  or  an 
average  of  $156,000,000  per  annum. 

The  net  result  of  Blake's  inquiries  on  this  point 
(which  occupy  a  large  part  of  his  report)  is  that  the 
total  product  of  gold  in  the  twenty  years  from  1848  to 
1868,  was  §2,757,600,000,  or  an  average  of  $137,880,000 
per  annum.  The  difference  of  $22,000,000  per  annum 
in  the  annual  averages,  according  to  Newmarch  and 
Blake,  does  not  necessarily  imply  a  disagreement,  as  the 
estimate  of  !Newmarch  is  for  the  fifteen  years  of  largest 
production,  while  Blake's  includes  five  years  more  of 
diminished  production. 

The  decrease  in  the  production  of  gold  noted  by 
Blake  in  1867,  and  which  he  predicted  must  soon  cause 
a  rise  in  its  value,*  has  continued  since  at  even  a  much 
greater  rate  than  contemplated  by  him.  At  the  time 
Blake  made  this  prediction  (1867)  the  annual  produc- 
tion of  gold  had  only  fallen  to  $130,000,000.  Since 
then  the  annual  product  has  fallen  until  it  touched  its 
minimum,  somewhere  about  $90,000,000,  in  1874.     It 


*  With  this  continued  decrease  in  the  annual  production,  it  seems  probable 
that  gold  will  soon  begin  to  sensibly  appreciate  in  value,  unless  some  new  and 
unlooked  for  discovery  of  placers  shall  be  made,  of  which,  however,  there  does 
not  appear  to  be  much  probability. 

It  was  argued  by  Chevalier  and  others  soon  after  the  great  discoveries  in 
Australia  aud  California,  that  gold  would  necessarily  depreciate  in  value;  that 
its  purchasing  power  was  destined  to  be  much  lessened  by  the  great  influx  of 
the  metal  from  these  new  sources.  But  the  relative  value  of  gold  has  not 
changed  as  much  as  was  expected,  and  it  would  now  seem  tbat  the  supply  did 
not  more  than  keep  pace  with  the  ever  increasing  demands  of  commerce  and 
industry,  stimulated  as  they  have  been  by  an  increasing  supply  of  gold.  The 
wonderful  increase  of  the  industrial  activity  of  the  world,  resulting  chiefly 
from  the  varied  developments  and  application  of  the  physical  sciences,  has 
been  sufficient  to  appropriate  all  the  excessive  production  of  the  past  twenty 
years.— Blake's  Report  on  the  Precious  Metals,  page  235. 


THE    ERA    OF    GOLD. 


101 


is  mainly  to  point  out  the  great  decrease  of  $40,000,000 
per  annum  in  the  gold  product  of  Australia  and  ISTew 
Zealand  from  1857  to  1874,  and  the  decrease  of  the 
same  amount  ($40,000,000)  in  the  annual  gold  product 
of  the  United  States  and  Territories  in  the  same  years, 
that  I  have  compiled  the  following  table,  viz. : 

ANNUAL  GOLD  PRODUCT  OF  THE  VARIOUS  QUARTERS  OF  THE  GLOBE 
AT  VARIOUS  PERIODS  FROM  1850  TO  1874. 


1850  . . 
1853  . 
1857  . . 
1867  . . 
1872  . . 
1874  . . 


United  States 

and 

Territories. 


Australia 

and 

New  Zealand. 


Russia 
and 
Asia. 


All  the  rest  of 

the 

World. 


(McCulloch's  Commercial  Dictionary,  estimate) 


$65,000,000 
55.000,000 
56,725,000 
36,000.000 
26,358,776 


§60,000,000 
65,000,000 
37,500,000 
37,000,000 
26,500,000 


$25,000,000 
25.000,000 
25.500,000 
24,000,000 
24,000,000 


$10,500,000 
10,000^000 
11,130,000 
10.000  000 
10,000,000 


Total  Produc- 
tion. 


$  04.000,000 
160,500.000 
150,000,000 
130,855.000 
107,000,000 

.    86,858,776 


The  amount  of  $26,358,776,  for  the  total  production 
of  gold  in  the  United  States  and  Territories,  is  taken 
from  the  report  of  R.  W.  Raymond,  United  States 
Commissioner  of  Mining  Statistics,  for  1875,  page  488. 
This  table,  showing  such  a  great  decrease,  was  not  made 
by  Raymond,  but  by  Mr.  J.  J.  Valentine,  superintend- 
ent of  Wells,  Fargo  &  Co.'s  Express.  Commissioner 
Raymond's  report  for  1875  was  not  given  to  the  public 
until  about  July,  1876,  and  even  then  it  contains  no 
later  estimate  of  the  annual  product  of  gold  in  the 
United  States  and  Territories  than  the  one  above  men- 
tioned for  1874,  and  even  for  that  year  Commissioner 
Raymond  does  not  himself  venture  to  make  any  esti- 
mate of  the  amount  of  gold  distinct  from  silver  pro- 
duced either  in  1874  or  1875,  though  he  corroborates 
Mr.  Valentine's  estimate  by  stating  the  total  product  of 
hoth  gold  and  silver  in  187 ^  at  $72,428,206,  whereas 


102 


HAND-BOOK    OF    FINANCE. 


Mr.  Yale n tine  makes  the  total  of  both  gold  and  silver 
$74,461,055.  The  cause  of  the  difference,  however,  is 
easily  seen  in  the  fact  that  Mr.  Yalentine  includes 
$1,636,200  of  gold  and  $357  of  silver  from  British 
Columbia,  and  $84,635  of  gold  and  $714,223  of  silver 
from  Mexico,  none  of  which  are  included  in  Raymond's 
aggregate.  It  will  be  seen,  therefore,  that  the  known 
product  of  gold  in  the  United  States  and  Territories  in 
1874  was  in  fact  only  $24,637,941,*  but  as  the  silver 


*  The  following  are  the  tables  from  United  States  Commissioner  Raymond's 
Report  for  1875,  page  488.  viz. : 
J.  J.  valentine's  statement  of  the  amount  of  precious  metals  produced 

IN  THE  STATES  AND  TFRRITORIES  "WEST  OF  THE    MISSOURI    RIVER    DURING   THE 
TEAR  1874. 


States  and  Terri- 
tories. 

*►, 

-5,2  cc 

"3.0  » 

o 

Gold  dust   and 
Bullion        by 
other  convey- 
ances. 

Silver   bullion 
by  express. 

03    >> 

03"^ 

£  sS 
S.£P 

00   5   g 
O 

Totals. 

California 

$16,015  568 

345.394 

553.564 

141.396 

1,207,607 

2,581,362 

83,721 

23,333 

1,590.700 

84,655 

1.487,473 

$1,601,556 

34.539 

55,356 

14.139 

120,765 

258.136 

8,372 

2,333 

$967,857 

30,954,602 

150 

$1,715,550 
4.117,698 

$20,300,531 
35,452.233 

Oregon 

609.070 
155.535 

551.572 

1.880,004 

600,000 
5,072.620 

3.439.498 

Utah .'.  .. 

746,565 

400 

1.745.705 

714:223 
357 

5.911.278 

26.066 

855,000 

4,191.405 

798,818 

British  Columbia. 

148,747 

1,036,557 

Grand  total.. 

$24,114,833 

$2  243,943 

$35,681  411 

$12,360,868 

$74,401,055 

R.  "W.  RAYMOND1?   STATEMENT  OF  THE  AGGREGATE  PRODUCT  OF  GOLD  AND 
IN  THE  UNITED  STATES  AND  TERRITORIES  IN  THE  YEAR  1874. 

Arizona $ 

California 20. 

Colorado °- 

Idaho J 

Montana 3. 

Nevada «>i 

New  Mexico • 

Oregon $609,070 

Washington 154,535— 

Utah 3. 

Wyoming  and  other  sources 

$72. 


487,000 

3H0.531 
188,510 
880.004 
844,722 
452,233 
500,000 

763,605 
911.601 
100.000 


THE    ERA    OF    GOLD.  103 

bullion  in  'Valentine's  table  was  presumed  to  contain  a 
considerable  amount  of  gold,  I  have  accepted  the  larger 
figure  as  representing  the  gold  product  of  the  United 
States  and  Territories  in  187*. 

The  gold  product  of  Australia  and  New  Zealand  for 
1853  I  have  derived  from  an  official  report  to  the  French 
government.  The  product  for  1867  is  from  United 
States  Commissioner  W.  P.  Blake's  Report  in  1868  ;  the 
amounts  for  1857  and  1872  are  approximate  estimates 
made  by  me  from  the  official  colonial  reports  of  the 
exports  of  gold  coin  and  bullion  from  Melbourne  and 
Sidney  in  those  years ;  the  amount  for  1874  is  based 
upon  a  statement  in  the  Melbourne  Argus  of  the  pro- 
duct of  1,102,614  ounces  of  gold  in  all  Australia  in  1874, 
and  to  which  I  have  made  an  addition  of  20  per  cent 
for  the  product  of  New  Zealand. 

The  amounts  set  down  in  the  table  made  by  me  as 
the  annual  products  of  Asia,  Africa  and  South  America, 
are,  like  all  other  estimates  ever  made  for  those  countries, 
merely  conjectural.  If,  in  regard  to  them,  I  have  erred, 
I  think  it  has  been  in  setting  them  too  high,  so  as  to 
avoid  the  possibility  of  exaggerating  the  vast  decrease 
in  the  world's  product  of  gold  in  the  period  from  1857 
to  1874,  and  it  will  be  found  that  the  amounts  set  down 
for  Russia,  Asia  and  the  rest  of  the  world,  exclusive  of 
Australia  and  North  America,  agree  with  the  highest 
estimates  made  by  others  who  have  examined  the 
subject. 

Within  the  past  year,  since  public  attention  has  been 
drawn  to  the  great  decrease  in  the  production  of  gold, 
several  tables  have  been  made  and  published,  purport- 
ing to  give  the  amount  of  gold  and  the  amount  of  silver 
produced  each  year  since  the  beginning  of  the  era  of 


104 


HAND-BOOK    OF    FINANCE. 


great  production  of  gold.  One  of  the  most  elaborate  of 
these  was  printed  in  the  Journal  des  Economists  for 
March,  1876,  and  has  been  much  referred  to  as  an  author- 
ity.* But  had  there  been  any  data  upon  which  a  table 
of  the  annual  product  of  the  precious  metals  could  be 
made  in  such  detail  for  each  year,  United  States  Com- 
missioner Blake,  who  made  such  an  elaborate  and  valu- 
able report  for  the  time  down  to  1867,  would  probably 
have  found  them.  In  fact,  all  the  "  authorities  "  on  the 
product  of  both  gold  and  silver  are  extremely  vague  and 
discordant  in  their  estimates  for  particular  years,  and  I 
should  be  inclined  to  make  a  large  allowance  from  the 
apparent  exactness  for  each  year  in  the  Journal  des 
Economists  table.  Reference  to  the  table  of  Mr.  New- 
march  will  show  how  much  even  "  authorities "  differ 
on  this  point. 

*  The  following  is  the  Journal  des  Economists  table  of  the  production  of 
gold  and  silver  each  year  since  1852: 


1852. 
1853. 
1854 
1855. 
1856. 
1857. 
1858. 
1859. 
1860 
1861. 
1862 
1863 
1864. 
1865. 
1866 
1867 
1K6S. 
1S69. 
1870 
1871. 
1872. 
1873. 
1874. 
1875. 


Gold, 

Silver,    ! 

millions. 

millions. 

$182% 

$40# 

155 

40^ 

127 

40V* 

135 

40Y2 

147^ 

40i/2 

133 

40% 

124% 

40% 

124  y2 

40% 

119 

40*/2 

114 

®lA 

107% 

45 

107 

49 

113 

51  % 

120 

52 

121 

50% 

116 

54 

120 

50 

121 

47# 

116 

51/2 

116/2 

61 

ioiy2 

65 

103^ 

70 

90^ 

71%  : 

97H 

62 

Total    Gold 

and   Silver, 

millions. 

$223 
195% 

167K, 

175/2 

188 

173% 

165 

165 

159% 

1561/, 

152% 

156 

164)* 

172 

171 1/2 

170 

170 

1683* 

167/j 

m% 

\m% 

173% 

162 
15914 


THE    EKA   OF   GOLD.  105 

But  in  order  to  make  an  approximate  estimate  of  the 
amount  of  gold  produced  in  the  world  from  1850  to 
1875,  it  is  necessary  to  harmonize,  as  near  as  possible, 
the  conflicting  estimates.  For  this  purpose  I  have  taken 
Blake's  estimates,  or  the  authorities  cited  by  him,  when- 
ever they  were  for  specified  years,  with  the  following 
result : 

TOTAL  PRODUCT   OF   GOLD  IN  THE  WORLD   FROM    1840   TO   1874  (IN- 
CLUSIVE) BY  PERIODS  OF   FIVE  YEARS   EACH. 

1840  to  1844 $150,000,000 

1845  to  1849 196,000,000 

1850  to  1854 660,000,000 

1855  to  1859 680,000,000 

1860  to  1864 560,000,000 

1865  to  1869 615,000,000 

1869  to  1874 530,000,000 

Total  for  thirty-five  years $8,391,000,000 

In  the  foregoing  table  the  total  product  of  gold  in  the 
world  in  the  35  years  to  1874  inclusive,  is  estimated  at 
$3,391,000,000.  But  in  the  preceding  chapter  on  Gold 
and  Silver  Coin  in  Europe,  the  total  stock  of  gold  coin 
and  of  bullion  used  as  bank  reserves  in  the  world  was 
estimated  not  to  exceed  $2,700,000,000.  What  then 
has  become  of  the  $639,000,000  difference,  and  of  all 
the  stock  of  gold  coin  existing  at  the  beginning  of  the 
period  in  question  ? 

All  estimates  of  the  consumption  of  gold  in  the  arts 
and  of  loss  by  wear,  by  casualties,  etc.,  have  been  only 
guesses  without  method,  and  yet  it  is  only  by  adopting 
some  method  or  rule  of  general  application  for  the 
consumption  of  gold  that  any  approximation  can  be 
made  to  the  amount  of  gold  coin  in  existence  at  any 
previous  period. 

Undoubtedly  the  largest  item  in  the  consumption  of 
gold  is  the  manufacture  of  jewelry  and  personal  orna- 


106  HAND-BOOK    OF    FINANCE. 

ments,  and  though  the  jewelry  is  not  consumed,  it  is 
pretty  well  understood  that  very  little  ever  comes  back 
into  the  market  as  "  old  gold."  Articles  of  jewelry  are 
as  a  rule  kept  as  souvenirs  even  after  they  are  no  longer 
worn  by  the  owners,  and  there  is  good  reason  for  the 
belief  in  a  continually  increasing  stock  of  jewelry  and 
gold  ornaments  in  the  world.  In  the  endeavor  to  esti- 
mate the  amount  of  gold  thus  annually  withdrawn  from 
circulation  as  coin,  we  must  first  approximate  to  the 
amount  of  jewelry  manufactured  and  sold. 

The  United  States  census  for  IS 70  shows  that  681 
jewelry  manufacturing  establishments  in  the  United 
States  produced  goods  annually  to  the  amount  of 
$22,000,000,  and  that  the  value  of  the  materials  used 
in  the  manufacture  of  this  amount  of  goods  was 
$9,187,000.  Besides  this  the  manufacture  of  watch- 
cases  amounted  to  $2,333,340,  in  which  the  value  of  the 
materials  was  $1,152,979.  The  declared  value  of  the 
net  imports  of  foreign  jewelry  into  the  United  States 
was  $1,020,000  in  1871,  $1,040,000  in  1872,  $866,000 
in  1873,  and  $275,000  in  1874.  This  includes  neither 
watches  nor  watch  movements,  though  the  value  of  the 
import  of  both  these  aggregates  from  $2,000,000  to 
$3,000,000  annually.  The  amount  of  jewelry  smuggled 
is  believed  to  be  larger  than  the  amount  reported  to  the 
customs  officers.  With  these  data  we  may  estimate  an 
annual  supply  of  something  near  $27,000,000  of  jewelry 
per  annum  for  a  population  of  say  40,000,000  in  1873. 
It  would  also  be  a  moderate  estimate  to  say  that  the 
total  value  of  gold  used  in  the  manufacture  of  the 
$27,000,000  worth  of  jewelry  is  one  fourth  of  the  whole, 
say  $7,000,000.  But  the  jewelry  manufactured  as  above 
mentioned  is  only  the  product  of  large  establishments; 


THE    ERA    OF    GOLD.  107 

an  addition  of  at  least  $500,000  more  gold  per  annum 
must  be  made  for  articles  manufactured  by  individual 
working  jewelers.  The  amount  of  gold  leaf  and  gold 
foil  manufactured  in  the  United  States  is  between 
82,000,000  and  $3,000,000  annually,  all  of  which  is 
consumed  here  by  dentists,  gilders,  photographers,  etc. 
These  items  make  an  aggregate  of  at  least  $10,000,000 
of  gold  per  annum  used  in  the  arts  in  the  United  States. 
This  amounts  only  to  the  apparently  insignificant  sum 
of  25  cents  to  each  individual  of  the  presumed  popula- 
tion of  40,000,000  in  1873.  But  if  we  extend  this  ratio 
to  3,500,000  of  population  in  Canada  and  4,500,000 
(half  the  population)  of  Mexico,  it  gives  a  total  of 
$12,000,000  per  annum,  and  if  we  extend  it  to  the 
300,500,000  population  of  Europe,  it  aggregates  $87,- 
100,000  per  annum.  It  is,  however,  not  to  be  pre- 
sumed that  the  people  of  Europe  and  Xorth  America 
are  the  only  consumers  of  gold  in  the  1,300,000,000 
population  of  the  globe,  and  we  must  reckon  at  least 
150,000,000  more  in  Asia  Minor,  the  northern  coasts  of 
Africa,  the  coasts  of  South  America,  the  West  Indies 
and  Australia,  thus  giving  at  least  500,000,000,  and 
omitting  entirely  800,000,000  of  the  people  of  the  world 
as  either  too  poor  or  too  barbarous  to  use  gold  either  as 
ornaments  or  in  the  arts.  Extending  the  ratio  of  25 
cents  per  capita  per  annum  to  this  500,000,000  it  gives 
an  aggregate  of  $125,000,000  per  annum. 

But  something  must  be  estimated  for  the  abrasion  of 
coins  and  for  the  loss  of  coin  in  fires,  shipwrecks  and 
other  casualties.  Dr.  Farr,  the  English  actuary  for  life 
insurance  computation,  made  an  elaborate  calculation, 
based  on  experiments  as  to  the  loss  from  abrasion  of 
coins,  and  arrived  at  the  conclusion  that  the  wear  on 


108  HAXD-BOOK    OF    FINANCE. 

British  gold  coins  was  y^-  of  1  per  cent  per  annum,  or 
1  per  cent  in  25  years.  This  is  sustained  also  by  the 
testimony  of  Mr.  J.  Miller,  of  the  weighing  room  of 
the  Bank  of  England,  given  before  a  royal  commission 
in  1868.  The  loss  by  fires,  wrecks  and  other  casualties 
can  scarcely  be  computed,  but  it  is  probably  larger  than 
the  loss  by  abrasion. 

McCulloch  estimated  in  1857  that  the  value  of  gold 
and  silver  in  Great  Britain  at  that  time  in  the  form  of 
plate  and  jewelry  was  about  $20  to  each  individual.  He 
also  estimated  that  the  annual  consumption  of  gold  and 
silver  in  the  arts  in  Europe,  North  America  and  Aus- 
tralia was  at  least  $80,000,000  per  annum,  but  that  of 
this  $80,000,000  about  20  per  cent  was  obtained  by  the 
fusion  of  old  plate,  the  burning  of  lace,  picture  frames, 
etc. 

With  these  data  we  may  proceed  to  estimate  the  con- 
sumption of  gold  in  the  arts  about  1873  as  follows,  viz. : 

Total  gold  used  in  the  arts,  and  in  the  loss,  wear  and 

accumulation  of  jewelry $125,000,000 

Deduct  20  per  cent  of  the  amount  used  in  jewelry,  re- 
turned as  old  gold,  say 18,000,000 

107.000,000 
Add,  for  loss  and  abrasion  of  gold  coins 3,000,000 

Total  consumed  and  absorbed  annually $110,000,000 

Jacob  estimated  the  amount  of  gold  and  silver  con- 
sumed in  the  arts  in  1830  at  about  $30,000,000.  This 
has  been  thought  by  all  other  authorities  as  too  low. 
But  at  the  same  time  he  estimated  so  large  an  amount 
for  the  loss  and  abrasion  of  coins  that  he  concluded  the 
whole  supply  of  precious  metals  between  the  years  800 
and  1492  had  been  only  about  sufficient  to  keep  the 
stock  on  hand  equal  to  what  it  was  in  800.     From  the 


THE    ERA    OF    GOLD.  109 

discovery  of  America  in  1492  to  the  beginning  of  the 
eighteenth  century  there  was  an  increase,  but  mainly  of 
silver,  which  became  the  monej7  of  the  world,  gold  being 
used  as  the  material  for  personal  ornament,  and  regarded 
much  in  the  same  light  as  precious  stones.  There  was, 
however,  an  increase  in  the  production  of  gold  between 
1810  and  1825,  and  with  this  and  the  advance  in  the 
arts  the  presumption  is  warranted  that  by  1839  the  con- 
sumption of  gold  in  the  arts,  together  with  the  loss  and 
abrasion  of  gold  coins,  was  at  least  $25,000,000  annu- 
ally of  gold  alone. 

McCulloch's  estimate  of  $80,000,000  (net  $64,000,000) 
for  the  annual  consumption  of  gold  and  silver  by  the 
322,000,000  of  population  in  Europe,  North  America 
and  Australia  in  1857,  would  be  at  the  rate  of  about  20 
cents  per  capita,  and  if  this  ratio  were  extended  to 
150,000,000  more  of  the  world's  population,  it  would 
aggregate  $94,000,000  per  annum.  As  the  vast  in- 
crease in  the  use  of  the  precious  metals,  indicated  by 
the  difference  between  the  estimates  of  Jacob  and 
McCulloch,  was  evidently  due  to  the  great  production 
of  gold,  it  is  to  be  presumed  that  the  increased  use  of 
the  metals  was  largely  of  gold  ;  and  though  there  are  no 
data  by  which  to  estimate  the  proportions  of  each,  I 
have  assumed  the  net  total  consumption  of  gold  in  the 
arts,  and  the  absorption  in  the  loss,  wear  and  accumula- 
tion of  jewelry  in  the  world  in  1857  at  about  $60,000^ 
000.  We  have  thus  three  points  in  the  consumption  of 
gold  by  which  to  estimate  the  aggregate  since  1839,  viz.: 
$25,000,000  in  1839,  $60,000,000  in  1857,  and  $110,- 
000,000  in  1873. 

In  accordance  with  the  foregoing  premises,  the  pro- 
duction of  gold,  the  consumption  in  the  arts  and  in  the 


110 


HA^D-BOOK    OF   FINANCE. 


accumulation  of  jewelry,  with  the  surplus  added  to  the 
stock  of  gold  coin,  may  be  stated  for  periods  of  five 
years  each  about  as  follows : 


Periods  of 
5  years. 


Production. 


Consumption. 


1840-1844 
1845-1849 
1850-1854 
1855-1859 
1860-1864 
1865-1869 
1870-1874 


$150,000,000 
196.000,000 
660.000,000 
680,000,000 
560,000,000 
Wil5,000,000 
-  530,000,000 


$132,000,000 
149,000,000 
180,000,000 
295,000,000 
398,000,000 
475.000,000 
539,000,000 


Additions    to 

stock  of 

gold  coin. 


$18,000,000 
47.000.000 
480.000,000 
385,000,000 
162,000,000 
140,000.000 


$3,391,000,000  $2,168,000,000  $1,232,000,000 

9^000,000 


Net  addition  to  stock  of  gold  coin  in  35 

years $1,223,000,000 


Decrease  of 

stock  of 

gold  coin. 


$9,000,000 


The  above  table  shows  a  presumed  addition  to  the 
world's  stock  of  gold  coin  and  bullion,  of  $1,223,000,000 
in  the  thirty-five  years  ending  with  1874.  In  the  article 
on  gold  and  silver  coin  in  Europe  it  was  estimated  that 
the  world's  stock  of  gold  coin  and  bullion  was  not  above 
$2,700,000,000  in  1875.  If,  therefore,  there  was  an 
addition  of  $1,223,000,000  in  the  preceding  thirty-five 
years,  it  would  show  the  total  stock  of  coin  and  bullion 
in  the  world  in  1839  to  have  been  $1,477,000,000.  This 
nearly  agrees  with  estimates  made  by  various  writers, 
and  should,  I  think,  be  regarded  as  sustaining  the  cor- 
rectness of  the  methods  by  wmich  I  have  attempted  to 
arrive  at  the  production,  consumption  and  stock  of  gold 
and  gold  coin  in  the  world. 

The  total  product  of  silver  in  the  world  during  the 
last  twenty-five  years  is  estimated  at  about  $1,250,000,- 
000,  or  at  the  average  rate  of  $50,000,000  per  annum. 
But  while  the  annual  silver  product  of  Mexico  (the  for- 


THE    ERA    OF    GOLD.  Ill 

mer  chief  source  of  supply)  has  been  decreasing,  there 
has  been  an  enormous  increase  in  the  United  States 
and  Territories,  the  total  product  having  increased  from 
$2,000,000  in  1861  *  to  $50,000,000  in  1874,  thus  bring- 
ing the  total  product  of  the  world  up  to  $70,000,000  in 
1874.  The  total  consumption  of  silver  in  the  arts  in 
Europe  and  North  America  is  probably  from  $18,000,000 
to  $20,000,000  per  annum.  If  there  is  $2,500,000,000 
of  silver  coin  in  circulation  in  the  world,  exclusive  of 
Asia,  the  annual  loss  by  abrasion  and  by  casualties  would 
average  at  least  the  fourth  of  one  per  cent  per  annum, 
and  thus  make  an  aggregate  of  $6,000,000  per  annum. 
According  to  the  statistics  of  silver  exports  given  in  the 
testimony  of  Sir  Hector  Hay  and  Mr.  S.  Pixley  before 
the  Parliamentary  Commission  in  May,  1876,  the  move- 
ment of  silver  from  Great  Britain  to  India  and  China 
for  eleven  years  to  the  end  of  1875,  had  been  $174,281,- 
000,  or  at  the  average  rate  of  $15,740,000  per  annum. 
Add  to  this  an  average  movement  in  the  last  few  years 
of  about  $8,000,000  per  annum  from  the  United  States 
to  China,  and  it  makes  an  aggregate  of  say  $24,000,000 
per  annum.  But  from  this  must  be  deducted  an  aver- 
age export  back  from  all  Asia  to  Europe  of  about 
$5,000,000  to  $6,000,000  per  annum,  leaving  the  net 
movement  of  silver  to  Asia  from  Great  Britain  and 
the  United  States  say  $18,000,000  per  annum.  Con- 
siderable silver  also  goes  to  Asia  from  the  Mediterra- 
nean and  South  America,  and  the  total  net  annual  ab- 
sorption of  silver  in  Asia  has  probably  been  $25,000,000 
per  annum  for  the  last  five  or  six  years. 

*  Raymond's  Report,  page  480. 


112 


HAKD-BOOK    OF    FINANCE. 


PRODUCTION,  CONSUMPTION   AND   EXPORTS   OF   SILVER  FOR  THE 
UNITED    STATES   AND    TERRITORIES. 


Year. 

Produced  in 
the  U.  S.  and 
Territories. 

Imports  of 
coin  and  bul- 
lion. 

Total 
supplies. 

Total  exports 

of  silver  coin 

and  bulliou. 

1871 

1872 

1873 

1874 

$22,000,000 
25,750,000 
36,500,000 
50,000.000 

$13,120,000 

4,838,000 

12,800,000 

9,000,000 

$35,120,000 
30,406,000 
49,300,000 
59,000,000 

$173,826,000 

$29,330,000 
27,580.000 
40,392,000 
32,587,000 

$134,250,000 

$39,758,000 

$129,890,000 

The  above  shows  a  difference  between  the  total  sup- 
plies and  the  total  exports  for  the  four  years  of  $43,680,- 
000.  The  statements  of  the  production  of  silver  in  the 
above  four  years  are  from  the  report  of  W.  R.  Raymond, 
United  States  Commissioner  of  mining  statistics  for  1875, 
page  480.  But  these,  like  all  other  statistics  of  the  pro- 
duction of  the  precious  metals,  are  only  approximations, 
and  may  vary  from  the  real  amounts  at  least  five  per 
cent.  It  is  quite  certain  that  there  was  no  such  accu- 
mulation of  silver  coin  in  the  United  States  in  four  years 
to  1874  as  $43,680,000.  The  total  silver  coinage  of  the 
United  States  Mint  for  the  four  years  ending  June  30, 
1875,  was  $32,416,000.  This,  however,  throws  but  little 
light  on  the  question  of  disposal  of  the  $43,680,000. 
In  the  report  of  the  Secretary  of  the  Treasury  for  1875 
he  states  that  in  accordance  with  the  resumption  act  of 
January,  1875,  the  treasury  had  purchased  and  coined 
and  held  in  the  treasury  on  June  30,  1875,  subsidiary 
silver  coins  to  the  amount  of  $10,000,000.  Deducting 
this,  and  estimating  $10,000,000  consumed  in  the  arts  in 
the  United  States  in  four  years,  and  it  still  leaves  a  pre- 
sumed accumulation  of  $23,680,000.  Part  of  this  has 
probably  gone  to  supplj-  the  monetary  circulation  of  the 


THE    ERA    OF    GOLD.  113 

Pacific  States  and  the  new  territories  west  of  the  Mis- 
souri river,  leaving  a  stock  of  bullion  and  ores  on  hand 
to  the  extent  of  prcbably  $15,000,000  to  $18,000,000 
from  the  product  of  the  four  years  to  the  end  of  1874. 


EXPLANATION  OF  DIAGRAM  No.  1, 

Showing  the  relative  product  of  gold  and  silver  each 
year,  and  the  consumption  of  gold  each  year  since  1825 : 

The  feather  line  which  begins  in  the  lower  left  hand 
corner  and  ascending  through  the  years  1847  to  1853  to 
the  point  marked  193  indicates  the  increase  in  the  pro- 
duction of  gold  to  its  culmination  about  1853.  The 
figures  given  at  intervals  along  the  line  indicate  the 
amount  in  millions  of  dollars  and  the  }rear  for  which 
various  writers  have  estimated  the  product  of  gold, 
the  names  of  the  authorities  being  given  in  the  upper 
margin  of  the  diagram. 

The  descending  of  the  feather  line  from  the  figures 
160  in  the  year  1853  to  87  in  the  year  1874  indicates 
the  decline  in  the  production  of  gold  in  accordance  with 
the  table  made  by  me. 

The  dotted  line  represents  the  table  of  the  Journal 
des  Economists. 

The  double  line  (==)  indicates  the  progress  of  the 
product  of  silver  since  1825,  and  has  been  made  after 
examining  the  authorities  cited  by  Blake,  and  also  with 
reference  to  the  reports  of  the  Ignited  States  Commis- 
sioner of  Mining  Statistics. 


114 


HAND-BOOK    OF   FINANCE. 


ASSUMED  PROGRESS  OF  THE  ANNUAL  CONSUMPTION  OF  GOLD  IN 
THE  ARTS,  BY  THE  LOSS  AND  ABRASION  OF  COINS,  AND  BY  THE 
LOSS,  WEAR  AND  ACCUMULATION   OF   JEWELRY: 


Year. 

Millions. 

Year. 

Millions. 

1839  . . 

25 

25.5 

26 

26.5 

27 

27.5 

28 

28.5  | 

29 

29.5  1 

30 

32 

34 

37 

40 

43 

47 

51 

1857 

55 

1840 

1858 

59 

1841 

1859 

63 

1842 

I860 

67 

1843 

1861 

1862 

1868 

1864 

1865 

1866 

1867 

1868 

1869 

1870 

1871 

1872 

71 

1844 

74 

1845 

77 

1846 

81 

1847 

85 

1848 

89 

1849 

92 

1850 

93 

1851 

97 

1852 

101 

1853  

105 

1854 

109 

1855 

1873 

1874 

110 

1856 

108 

DIAGI 
Showing  the  Annual  Production  of  G-old,  the  Annual  Producti 

FlFTFS 

Explanation. — The  names  on  the  upper  margin  of  the  diagram  are  the  authoi 
gold  in  particular  years.  The  names  stand  directly  over  the  amounts  and  the  yea> 
to  1875,  is  drawn  after  the  figures  in  the  table  of  the  Journal  des  Economists  give 


0D    - 

.2*5 

5  ° 
2^ 

*5 
of  *- 

»-  v 
>»= 

II 

no 

T 


200      Millions  of 

1 

Dollar  i 

190 

'• 

180 

" 

170 

" 

160      . 

" 

150 

'■ 

140 

" 

130 

" 

120 

" 

* 

110 

'• 

100             •'       t; 

'■ 

90                "       " 

- 

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op  Silver,  and  the  Annual  Consumption  of  Gold  in  the  Arts  for 

EARS. 

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;>  which  they  refer.  The  dotted  line  beginning  in  the  year  line  1852,  and  extending 
t  page  104.     For  full  explanation  see  page  113. 


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THE  ERA  OF  DEBT. 


FINITE  following  compilation  of  the  national  debts 
X  of  all  countries  was  made  mainly  to  show  the 
"■eneral  increase  of  that  class  of  indebtedness  in  the 
last  twenty-five  years.  It  is,  however,  impossible 
to  ascertain  in  all  cases  the  amounts  for  1850.  In 
most  of  the  instances  where  no  amount  is  given  at 
as  early  a  date  as  that  there  was  no  debt,  and  the 
amounts  given  for  years  subsequent  to  that  are  in- 
tended only  to  show  the  increase  in  the  latter  part  of 
the  period.  The  amounts  are  given  in  each  case  in 
their  equivalent  in  United  States  money: 


Amount. 


Year. 


Amount. 


Year. 


Austria-Hungary 

Belgium 

Denmark 

France 

Prussia 

Bavaria 

Wurtemburg 

Saxony  

Great  Britain  and  Ireland. 

Greece  

Italy 

Netherlands 

Portugal 

Russia 

Spain 

Sweden 

Norway 

Switzerland 

Turkey 

United  States 

Canada 

Mexico 


$625,000,000 

123,798.281 

74,312.325 

*1 ,000,000,000 

86.006'.  666 
*30,000.000 


3,928,000,000 

25.000  000 
586,000,000 

105,000,006 

625.000.000 
♦1,075.000.000 


Noue. 
63.452.773 

70  000  000 
317,357,250 


1848 
1844 
1866 
1850 

i855 
1850 

i836 
1850 
1860 

1856 
1850 
1869 


1850 
IP  50 
1868 
1865 


SI, 655  964,500 

185,909.802 

55,769,055 

3,750,337.006 

246,000.000 

156,685,000 

73  500.000 

3  000  000 

3,876.000,000 

75.000.000 

1,951.500  000 

386.3n0.000 

364.000.000 

2,149  900.000 

2,650.000.000 

43.000.000 

8,000,000 

6.000.000 

900  000  0P0 

+2,245  018.579 

116.0*2  917 

395,500.000 


1875  Dec. 

1873 

1875 

1875  Jan. 

1875  Jan. 

1874 

1*74  May. 

1874 

1875  Men. 

1875 

1873 

1874 

1873 

1875  Jan. 

1675  June. 

1875 


1874 

1876Jun.30 
1875  July. 
1874 


*  Estimated. 

+  This  includes  all  the  non-interest-bearing  debt  and  the  Pacific  Railroad 


bonds. 


116 


HAtfD-BOOK   OF   FINANCE. 


Amount. 

Year. 

Amount. 

Year. 

1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 
1859 

369,294,430 

67,700,000 

17.000,000 

63,400.000 

75.000,000 

16,400.000 

4,400.000 

16,000.000 

29,700,000 

537,675.000 

350.000.000 

16,500  000 

8,615,000 

3.200.000 

54,500.000 

50.000.000 

15  000.000 

17.000  000 

60,000,000 

9.500,000 

24,000.000 

25.750  000 

3,750  000 

211.785.000 

100,000,000 

1875  June. 

1875  June. 

1875 

1875  Sept. 

1873 

1855 

1875 

1875 

1875 

1874  April. 

1875 

1875 

1874 

Argentine  Republic 

Bolivia 

Chili 

Colombia 

Ecuador 

Guatemala 

llavti  

Honduras 

India 

299,700,606 

Egypt 

1850 

Japan  

1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 
1850 

Colony  of  Good  Hope 

Ceylon 

1874 
1874 

New  South  Wales 

New  Zealand 

1873 
1873 
1875 
1875 
1874 
1875 
1875 
1875 

Queensland 

South  Australia 

"Victoria 

Nicaragua 

Paraguay  

Peru 

San  Domingo , 

Uruguay  

1875  Mch. 
1875 

\  enezueia 

Totals i     $9,032,626,023  ! 

$23,439,471,926 

The  next  most  important  class  of  funded  debts  is 
that  created  in  the  construction  of  railways,  nearly  the 
whole  of  which  has  been  the  growth  of  the  last  twenty- 
five  years.  It  was  only  as  far  back  as  1814  that  George 
Stephenson  constructed  his  first  locomotive,  and  the  first 
railroad  ever  constructed  with  a  view  to  carrying  passen- 
gers was  the  Stockton  and  Darlington  road,  opened  Sep- 
tember 27,  1825.  The  Liverpool  and  Manchester  was 
opened  in  1830.  The  first  road  opened  in  the  United 
States  was  from  Quincy,  Mass.,  to  tide-water,  four  miles, 
in  1826.  The  first  important  road  begun  in  the  United 
States  was  the  Baltimore  and  Ohio,  in  1828.  In  1829-30 
roads  were  begun  in  nearly  all  the  Atlantic  States.  So 
great  was  the  activity  that  in  1836-7  the  railroad  mile- 
age of  the  United  States  exceeded  that  of  any  other 
country  in  the  world,  a  position  which  the  United  States 
continues  to  hold,  as  will  be  seen  by  the  fact  that  her 


THE    ERA    OF    DEBT. 


117 


railroad  mileage  is  about  40  per  cent  of  the  whole  amount 
in  the  world.  In  1850  the  total  mileage  of  the  United 
States  was  9,021.  By  1860  it  had  increased  300  per 
cent;  by  1870,  500  per  cent,  and  at  the  close  of  1875, 
800  per  cent.  This  may  be  taken  as  the  general  meas- 
ure of  the  advance  of  that  agency  which  has  revolu- 
tionized the  commerce  of  the  world  in  the  brief  space 
of  twenty-five  or  thirty  years. 

Poor's  Railroad  Manual  states  the  aggregate  of 
funded  and  floating  debts  of  railroads  in  the  United 
States  at  the  close  of  1875  at  $2,459,607,349,  or  at  the 
average  rate  of  $31,600  per  mile  of  the  74,658  miles  of 
road.  If  $30,000  per  mile  were  taken  as  the  average 
indebtedness  of  the  182,699  miles  of  railways  in  the 
world  at  the  close  of  1875,  it  would  give  an  aggregate 
of,  say,  $5,481,000,000.*  But  in  Belgium,  Germany, 
Denmark,  Holland  and  Sweden  the  governments  have 
constructed  an  aggregate  of  about  9,500  miles.     In  Rus- 


*  The  following  table  of  the  railroad  mileage  of  the  world  at  the  close  of 
1875  is  condensed  from  Poor's  Railroad  Manual: 


Miles. 

Miles. 

United  States 

Canada 

Mexico 

Cuba 

74.658 

4,483 

327 

427 

144 

34 

837 

994 

972 

629 

197    , 

68 

47 

43 

39 

2.148 

6,172 

291 

41 

16,696 

France 

Germany 

Russia 

Italy. 

12,376 
17,372 
12,074 
4  787 

Central  America 

6  366 

Jamaica 

Hungary 

Spain 

Sweden 

Belgium 

Switzerland 

Holland 

3,965 
3  818 

Brazil 

Argentine  Republic 

2  478 

Peru 

2,249 

1,098 

1,062 

789 

Chili 

Uruguay    

Guiana 

Paraguay 

Colombia 

Portugal 

Norway 

Turkey 

Roumania 

Egypt 

Algeria 

Tunis 

Mauritius  and  Cape  Colony . 

643 
325 

Venezuela 

1  116 

Australia 

766 

India 

1,013 
333 

Ceylon  and  Java. . . . 

Japan 

37 

Great  Britain  and  Ireland 

155 

118 


HAND-BOOK    OF    FINANCE. 


sia,  also,  the  government  has  aided  the  construction  of 
railways  something  after  the  plan  upon  which  govern- 
ment aid  was  extended  to  the  Pacific  railways  in  the 
United  States.  In  these  cases  the  railroad  debt  has 
been  counted  as  part  of  the  national  debt,  and  included 
in  the  debts  of  that  class  in  the  table  of  national  debts. 
We  must,  therefore,  deduct  about  $500,000,000  for  these 
and  the  floating  debts,  thus  leaving  the  aggregate  of 
funded  railroad  debts  in  1875  about  $5,000,000,000. 
Measured  by  the  mileage,  the  aggregate  of  these  debts 
was  probably  about  as  follows,  in  round  numbers,  viz. : 
$3,500,000,000  in  1870;  $2,000,000,000  in  1860,  and 
$700,000,000  in  1850. 

Municipal  debts  come  next  in  point  of  magnitude, 
and  in  these  as  they  relate  to  American  cities  we  find 
an  increase  exceeding  that  of  any  other  class  of  funded 
debts,  except  those  of  the  railroads,  the  aggregate  at  trie 
close  of  1875,  as  indicated  in  various  compilations,  was 
about  $700,000,000.*    As  regards  a  similar  class  of  debts 

*  The  most  comprehensive  summary  I  have  seen  of  these  was  printed  in  the 
Public  (New  York),  as  follows: 


New  York 

Philadelphia  (a) 

Boston 

Brooklyn  

Baltimore 

New  Orleans 

Washington 

St.  Louis 

Cincinnati 

Chicago 

Jersey  City 

Pittsburgh 

Louisville 

Newark 

Providence 

Cleveland 

Buffalo 

Portland 

Memphis... 

Rochester 

Charleston,  S.  C 
Elizabeth 


(b)  1870. 

1875-76. 

$54,436,180 

$161,165,299 

42,103,866 

69.616.523 

22.598.361 

43.933.165 

20.000 

38.494.000 

13,568,431 

32.943,425 

26.500,000 

22,690.438 

2.363.885 

22,000.000 

13,613  000 

17,423.000 

5.020.000 

17.235.500 

14,103,000 

16.996,387 

5.133,414 

14.247,500 

4,042.619 

13.533.819 

5.006,000 

10,795.000 

3.100.000 

9.465,750 

1,795,870 

8,843.800 

2.101,255 

8.086.900 

2.031.530 

7,264,291 

2,706.011 

6.462,800 

5.271.892 

5.851,786 

634.567 

5.579.000 

5.137,208 

5,514.814 

'         2,678,700 

5,400,000 

THE    ERA    OF    DEBT. 


119 


in  Europe,  there  is  no  satisfactory  source  of  information. 
In  some  of  the  capitals  the  debts  properly  chargeable  to 


Richmond 

Cambridge 

Toledo 

Savannah  

Albany  

San  Francisco  (a) 

Worcester 

Mobile 

Fall  River 

Milwaukee 

Bangor 

Powell,  with  Cambridge  in  Middlesex  Co. 

Detroit 

Norfolk 

Augusta 

Lynn 

Nashville 


Alleghany,  with  Pittsburgh  in  Alleghany  Co. 
Chelsea,  with  Boston  in  Suffolk  Co 


Lawrence,  with  Lyun  in  Essex  Co 

Springfield 

Salem,  with  Lynn  in  Essex  Co 

Somerville,  with  Cambridge  in  Middlesex  Co. 

Indianapolis 

St.  Joseph 

Brookline 

Columbus,  Ohio 

St.  Paul 

New  Bedford,  with  Fall  River  in  Bristol  Co. . 

Beverly,  with  Lynn  in  Essex  Co 

Lynchburg 

Galveston 

Holyoke,  with  Springfield  in  Hampton  Co 

Fitchburg,  with  Worcester  in  Worcester  Co.. 

Northampton 

Columbus,  Ga 

Zanesville 

Newburyport.  with  Lynn  in  Essex  Co 

Peabody,  with  Lynn  in  Essex  Co 

Medford,  with  Cambridge  in  Middlesex  Co.  . . 

Total 

Massachusetts  (other  towns) 

Ohio  (other  towns) 

Total 


(b)  1870. 


1875-76. 


2,111,431 

6,028,559 

401,962 

2,099,592 

2,800,000 

7,458,647 

2,774,429 

2,195,458 

1,462,033 

118.000 

448^93 

723,600 
1.855.741 
L395,250 
4,424.465 
2,050,000 


646,439 


155.000 
500.000 
648,794 
none.. 
812,014 


720,895 
250,000 


357,778 
400,000 
none. . 


$276,804,299 

1,292.676 
549,150 


4,632,708 

4  280,400 

3,782,280 

3,736.917 

3,683.000 

3,431,000 

3  099,732 

2,864,100 

2,569,157 

2,544,963 

2,484.000 

2.289,000 

2,282,900 

2,150,014 

2,100.000 

2,030,500 

1,737.282 

1,667,000 

1,661,840 

1.594.346 

1,562,805 

1,483.725 

1,472,854 

1.455.000 

1,380,900 

1,311,350 

1.261.392 

1,230,262 

1,195,000 

1.041,800 

921.509 

873.000 

836.500 

698.027 

663,779 

582,500 

548,059 

535,613 

523,577 

519,500 


£61K.2(i5.488 
14,161.991 
8,424.388 
$278,646,125  !    $640,791,867 


(a)  Census  statement  of  county  debt  given  for  1870. 

(b)  In  this  table,  under  1870  are  placed  not  the  debts  of  cities  at  that  date, 
but  the  debts  of  all  municipalities  in  the  counties  in  which  those  cities  are 
located,  as  given  in  the  census  report.  When  there  are  several  cities  in  the 
same  county,  the  name  of  the  county  is  given  against  each  city  after  the  first 
named,  in  place  of  repeating  the  total  indebtedness  of  municipalities  in  that 
county.  Thus  the  first  column  gives  an  indebtedness  larger  than  was  reported 
to  the  census  marshals  for  the  cities  named,  and  as  no  city  debt  was  then  re- 
ported for  Philadelphia  or  San  Francisco,  the  amounts  then  reported  as  county 
debt  are  inserted. 


120 


HAND-BOOK    OF    FINANCE. 


the  municipalities  are  complicated  with  the  national 
debts,  though,  on  the  whole,  municipal  debts  are  be- 
lieved to  be  much  smaller  in  proportion  to  population 
than  in  the  United  States.*  It  would  seem,  however, 
that  a  very  moderate  estimate  of  the  aggregate  of  public 
debt,  not  national,  in  Europe  in  1875  at  say  $3,000,- 
000,000,  and  also  to  assume  that  the  rate  of  growth  of 
these  since  1850  had  corresponded  with  the  growth  of 
railroad  and  national  debts.  The  primary  object  of  this 
compilation  of  debts  is  to  show  the  aggregate  amount 
of  funded  debts  negotiable  in  the  financial  centers  of 
Europe  and  America,  thus  showing  the  increased  de- 
mand for  coin  to  pay  interest,  and  this  even  without 
the  details  of  railroad  and  municipal  debts  in  Europe, 
the  aggregate  given  for  Europe  must  be  about  correct. 

*  The  annual  interest  on  the  debt  of  Paris,  together  with  the  amount  appro- 
priated to  the  sinking  fund  for  the  year  1873  was  46,170,825  francs,  or  about 
$9,230,000,  thus  indicating  a  debt  (at  four  per  cent)  of  about  $183,000,000.  The 
following  statement  of  the  debts  of  English  cities  is  also  said  to  have  been 
called  out  by  some  discussions  in  Parliament  in  1875. 


Cities. 

Population, 
1871. 

Debt. 

3,266,987 

493,405 

379.374 

259,212 

145.830 

182,552 

65.510 

92.658 

103.858 

343.787 

113.100 

124,801 

63.485 

74.358 

156.878 

85,426 

128,443 

82.928 

37,389 

104.409 

80,782 

$25,918,000 

19,552,000 

16,300,000 

11,800,000 

8,950,000 

Bristol                                   

5,508,000 

Halifax     

5,080.000 

3,600.000 

Brighton 

2.950.000 

2,865.000 

Oldham 

2.600.000 

Salford 

2,430,000 

Rochdale 

2.150.000 

2,014,000 

Wolverhampton 

1,873,000 

1,730.000 

Newcastle 

1.654.650 

Blackbu  rn 

1.300,000 

Ashton 

1,187.000 

Sunderland -. 

1.112.000 

1,090,000 

Total 

$121,663,650 

THE    ERA    OF    DEBT. 


121 


Of  American  State  debts  the  aggregate  in  1875  was 
about  $370,000,000,*  and  of  county  debts  about  $180,- 
000,000.  These  two  classes  having  increased  much  less 
rapidly  than  city  or  railroad  debts. 

We  have,  therefore,  the  following  as  the  approximate 
statement  of  the  aggregate  of  funded  national,  railroad, 
municipal  and  corporate  debts  in  1875,  intended  to  be 

*  The  following  statement  of  the  debts  of  the  respective  States  in  1875,  as 
compared  with  1860,  is  compiled  from  an  elaborate  table  printed  in  the  New 
York  Bulletin  of  February  8,  1876  showing  the  relative  increase  of  population, 
taxation  and  debt  in  the  several  States,  viz. : 


Maine 

New  Hampshire 

Vermont 

Massachusetts 

Khod«  Island 

Connecticut 

New  York 

New  Jersey 

Pennsylvania 

Delaware 

Maryland 

District  of  Columbia 

Ohio 

Indiana 

Michigan 

Illinois 

Wisconsin 

Minnesota 

Iowa 

Nebraska 

Missouri 

Kansas 

Virginia 

West  Virginia 

Kentucky 

North  Carolina 

Tennessee 

South  Carolina 

Georgia 

Florida 

Alabama 

Mississippi 

Louisiana 

Arkansas 

Texas 

California 

Nevada 

Oregon 


1860. 


162,727 
82.148 
175,000 
175,978 


50,000 
.192.975 

95.000 
,638,961 


34 
38 
14,8& 
14 


250,234 
597,741 
649.335 
329.747 
100.000 
563,653 
322,296 


23,903,000 


003441 
001,720 
579.244 
558.935 
643,667 
691,574 
170.750 
158,000 
027,000 
271,707 
023.903 
592.622 


1875. 


3.885,000 


$266,781,525 


$5,272,688 

3,849,000 

312,000 

29,465.204 
2,563,506 
5,014,500 

28,328.686 
2,496,300 

23,233,137 
1,231.000 

11,372,677 

18.792.563 
7,949,920 
5,003.538 
1,588,136 
1.480,972 
2.252.000 
2,755,000 
543.056 
458,228 

20.839.000 
1,385,775 

33,548  309 

17.068,094 
2.159.517 

28,952.345 

25,031,000 
7,674.702 

10,986  500 
1,433.767 

12.132,000 
6.383,087 

19.061.645 

16,483,780 

5,321,914 

3,472,000 

960,000 

290,477 


$367,146,023 


122  HAND-BOOK   OF   FINANCE. 

negotiable  in  the  financial  centers  of  Europe  and  North 
America,  viz.: 

National  debts $23,400,000,000 

Railroad  debts 5,000,000,000 

State  and  municipal  debts 4,250,000,000 

$32,650,000,000 

The  actual  liquidation  of  this  vast  sum,  amounting  to 
just  about  eight  times  the  total  of  all  the  gold  and 
silver  used  as  money  in  Europe  and  America,  is  of 
course  not  to  be  contemplated  —  it  is  impossible.  In 
countries  where  the  revenue  is  sufficient  to  pay  the 
interest  on  the  public  debts  and  all  other  expenses,  with- 
out leaving  a  deficit  to  be  added  to  the  principal  each 
year,  the  national  debts  will  in  most  cases  become  per- 
manent institutions,  the  principal  payable  never,  as  in 
Great  Britain ;  and  in  a  few  cases,  as  in  Great  Britain 
and  the  United  States,  the  burden  of  annual  interest 
may  be  reduced  from  year  to  year,  unless  the  process  of 
reduction  is  interrupted  —  as  in  most  cases  it  has  been — 
by  expensive  wars.  But  in  many  countries  whose  gov- 
ernments are  infirm,  and  whose  revenues  are  fluctuating 
and  uncertain,  the  high  rates  of  interest  they  are  obliged 
to  pay  insures  the  ultimate  bankruptcy  of  the  national 
treasuries,  and  the  final  repudiation  of  the  debts,  as  in 
the  cases  of  Mexico  and  Spain.  The  very  magnitude  of 
the  volume  of  funded  debts  in  Europe  and  America  is 
now  compelling  a  reduction  in  the  general  rates  of  in- 
terest for  money,  a  decline  which  it  seems  must  become 
permanent  as  one  of  the  characteristic  features  of  this 
era  of  debt,  and  affecting  all  the  employments  of  capital. 
Until  the  aggregate  volume  of  annual  interest  on  the 
funded  debts  of  Europe  and  America  is  reduced  to  a 
point  where  it  can  be  paid  without  distress  to  the  com- 


THE    ERA    OF    DEBT.  123 

mercial  and  industrial  interests  from  which  the  interest 
is  drawn,  there  will  be  frequent  defaults  and  repudia- 
tions on  large  debts.  This  would  of  itself  divert  capital 
to  the  securities  of  the  best  credit,  and  by  its  concentra- 
tion on  them  establish  lower  rates  of  interest  for  money 
throughout  the  world. 

At  say  5  per  cent  (which  is  probably  about  the  aver- 
age of  the  stipulated  rates  in  the  various  classes  of 
funded  debts  referred  to  in  the  preceding  pages),  the 
total  annual  interest  amounts  to  about  $1,600,000,000. 
Payment  of  the  principal  being  left  entirely  out  of  the 
question  as  impossible  for  any  considerable  portion  of  it, 
this  item  of  the  aggregate  annual  interest  is  one  of  the 
three  great  factors  in  the  financial  problems  of  the  time, 
the  other  two  factors  being  the  amount  of  non-interest- 
bearing  debt,  or  paper  money,  and  the  amount  of  gold 
and  silver  in  the  commercial  world  available  for  use  as 
money. 

In  endeavoring  to  give  the  relative  proportions  of 
these  for  Europe  and  America,  there  seems  no  way  but 
to  include  a  great  portion  or  nearly  the  whole  of  the 
debts  of  South  America,  Egypt  and  India.  Portions  of 
these  are,  of  course,  held  in  the  countries  where  they 
were  created ;  but  it  is  well  known  that  the  great  bulk 
of  the  South  American  loans,  as  well  as  those  of  Egypt, 
Turkey  and  India,  were  negotiated  in  London,  and 
though  the  interest  on  these  debts  would  be  paid  by 
the  industries  of  the  countries  whence  they  came,  the 
products  of  those  industries  would  first  have  to  be  sold 
for  the  money  of  Europe. 

For  Europe  and  North  America,  with  their  aggregate 
of  357,000,000  of  population,  of  which  say  340,000,000 
are  civilized  and  commercial  people,  I  should  therefore 


124  HAND-BOOK   OF   FINANCE. 

estimate  the  three  above  mentioned  factors  at  about  the 
following  proportions  in  1875,  viz. : 

Paper  money $3,100,000,000 

Annual  interest  on  funded  debts 1,600,000,000 

Stock  of  gold  and  silver  used  as  money 4,000,000,000 

The  next  item  having  an  important  bearing  on  the 
use  of  money,  and  consequently  on  the  demand  tor  gold 
and  silver,  either  for  circulation  or  as  bank  reserves  held 
for  the  redemption  of  paper  money,  is  the  increase  of 
traffic.  On  this  point  there  can  of  course  be  no  statis- 
tics that  will  not  be  largely  conjectural.  As  an  index 
of  the  volume  of  traffic  at  any  time  in  the  past  twenty 
years,  I  have  assumed  that  the  aggregate  of  bank  clear- 
ings in  the  ten  largest  commercial  cities  of  the  United 
States  represents  about  one  third  of  the  total  volume 
of  payments  of  money  in  the  traffic  of  the  country.  In 
New  York  the  daily  average  clearings  of  the  banks, 
exclusive  of  the  stock  exchange  transactions,  is  stated 
by  the  manager  of  the  clearing  house  as  averaging  $40,- 
000,000  per  day  in  1874.  The  average  daily  clearings 
in  Philadelphia  in  1874  were  about  $7,500,000;  in 
Chicago,  $3,500,000 ;  in  Baltimore,  Pittsburgh,  Cincin- 
nati, St.  Louis  and  New  Orleans  together,  $5,000,000. 
The  aggregate  transactions  of  the  clearing  houses  of 
the  ten  largest  cities  of  the  United  States,  exclusive  of 
the  stock  exchange  business  in  New  York,  in  1874  was 
about  $64,000,000  daily,  of  which  about  62  per  cent  was 
transacted  through  the  New  York  clearing  house.  If 
this  aggregate  of  $64,000,000  daily  comprises,  as  I  have 
assumed,  one  third  of  the  total  payments  of  money  in 
commercial  transactions,  exclusive  of  the  stock  exchange 
business  in  New  York,  it  would  imply  payments  of  cur- 
rency to  the  extent  of  $128,000,000  daily,  thus  giving 


THE   ERA    OF   DEBT. 


125 


an  aggregate  of  $192,000,000  paid  daily  in  commercial 
transactions.  This  would  imply  that  nearly  18  per  cent 
of  the  total  of  $750,000,000  of  paper  currency  was  paid 
out  each  day,  thus  using  the  whole  volume  of  currency 
in  every  week,  but  leaving  an  average  of  say  78  per 
cent  of  it  resting  temporarily  in  the  national  treasury, 
in  the  banks,  and  in  the  pockets  of  the  people. 

Upon  the  presumption  that  the  New  York  bank 
clearings,  exclusive  of  the  stock  exchange  business, 
represent  over  30  per  cent  of  the  total  volume  of  pay- 
ments in  commercial  transactions  in  the  United  States, 
we  may  estimate  the  increase  of  traffic  in  the  United 
States  by  the  increase  of  bank  clearings  in  that  city,  and 
in  Europe  by  the  increase  of  the  London  clearings 
(given  in  dollars),  as  shown  in  the  following  table,  viz. : 


NEW  YORK  CLEARINGS. 

LONDON 
CLEARINGS. 

Year  ending  Sept.  30. 

Currency 
Exchanges. 

Cash  Balances 
Paid. 

Years  ending  Apl. 

1854 

$5,750,455,987 

5.362,912,098 

6,906,213,328 

8,333,226.718 

4,756,664.386 

6,448,005,956 

7,231,143,056 

5,915,742.758 

6,871,443,591 

14,867,597,848 

24,097,196,655 

26,032,384,341 

28,717,146,914 

28,675,159,472 

28,484,288,636 

37,407,028,986 

27,804,539.405 

29,300.986,682 

32,636,997,403 

33.972,773.942 

20,850.681.962 

$297,411,493 

289,694,137 

334,714,489 

365,313,901 

314,238,910 

363,984,682 

380,693,438 

353,383,944 

415,530,331 

677.626,482 

885,719,204 

1,035,765,107 

1,066,135,106 

1,144.963,451 

1,125,455,236 

1,120,318,307 

1,036.484,821 

1,209,721.029 

1.428,582,707 

1,152,372,108 

971,231,280 

1855 

1856 

1857 

1858 

1859 

1860 

1861 

1862 

1863 

1864 

! 

1865 

1 

1866 

1867 



1868 

1869 

1870 

1871 



$15,278,055,000 
17,670,195,000 
18,603,116,500 
20.092,315,000 
26,748,610,000 
30.016,675,000 
29,970,000,000 

1872 

1873 

1874 

126 


HAND-BOOK   OF   FINANCE. 


These  figures  for  the  New  York  clearings  include  the 
stock  exchange  business,  which  in  1874  comprised  about 
40  per  cent  of  the  whole.  But  even  deducting  this,  the 
increase  since  1854  is  about  150  per  cent.  The  London 
clearings  are,  I  believe,  given  exclusive  of  the  stock 
exchange  business,  and  these  show  an  increase  of  nearly 
100  per  cent  in  the  six  years.  From  these  facts,  together 
with  the  vast  increase  of  railroads,  which  have  stimu- 
lated internal  traffic  in  all  countries  to  a  much  greater 
extent  than  is  shown  in  their  export  or  import  trades,  it 
seems  reasonable  to  conclude  that  the  total  volume  of 
traffic  nearly  quadrupled  in  the  twenty-five  years  from 
1850  to  1875.*  Further  evidence  in  support  of  this 
estimate  of  the  increase  of  traffic  is  to  be  found  in  the 
value  of  the  tonnage  and  in  the  gross  earnings  of  the 
railroads  as  compared  with  twenty-five  years  ago. 
These  items  for  the  United  States  are  given  in  Poor's 
Railroad  Manual  as  follows : 


Railroad 
Mileage. 

Value  of 
Railroad 
Tonnage. 

Gross  Earnings 
from  Freight 
and  Passengers. 

1851 

10.982 
53,399 
72,623 

$810,725,200 

10,875,750,000 

(say)  15.000,000.000 

$39,406,358 

1870 

1875 

503,065,505 

*  Much  has  been  said  of  the  diminished  use  for  either  paper  currency  or 
coin  by  reason  of  the  economizing  expedient  of  the  clearing  hotise  system. 
The  extent  of  this  I  estimate  as  follows,  viz. :  The  total  daily  bank  clearings 
in  Europe  and  North  America  do  not  exceed  $300,000,000;  deducting  say  SH  per 
cent  for  ''balances"  paid  in  money,  it  would  leave  the  total  economy  of 
paper  money  and  coin  say  $290,000,000.  This  is  the  total  extent  of  the  economy 
for  one  year  as  well  as  one  day. 


THE   ERA   OF   DEBT.  127 

EXPLANATION  OF  DIAGRAM  No.  2. 

Gold  and  Silver.  The  upper  double  line  is  intended 
to  show  the  probable  aggregate  of  gold  and  silver  used 
as  money  in  Europe  and  North  America,  the  presump- 
tion being  that  nearly  the  whole  increase  was  of  gold, 
the  continuous  movement  of  silver  to  Asia  having  pre- 
vented any  considerable  increase  of  that  kind  of  money 
in  Europe  or  North  America,  the  effects  of  the  increase 
in  the  production  of  silver  from  1863  to  1874  having 
been  neutralized  in  this  respect  by  the  demonetization 
of  silver  in  Germany. 

Stock  of  Gold  as  Money.  The  line  of  dashes  ( ) 

is  intended  to  represent  the  stock  of  gold  used  as  money 
in  Europe  and  North  America,  it  being  assumed  that 
about  80  per  cent  of  the  average  annual  increase  of  gold 
in  the  world  from  1848  to  1870  was  added  to  the  stock 
in  these  countries. 

Volume  of  Paper  Money.  The  great  fluctuations  in 
the  dotted  line,  representing  the  volume  of  paper  money, 
are  explained  by  the  following  facts :  Eirst,  an  increase 
in  Austria  from  1854  to  1858  of  about  $100,000,000. 
Second,  an  increase  in  the  United  States  from  1862  to 
1866  of  nearly  $1,600,000,000,  about  $1,000,000,000  of 
this  being  composed  of  the  7-30  and  compound  interest 
notes  and  the  various  issues  of  certificates  of  indebted- 
ness issued  by  the  treasury,  which,  though  not  of  the 
same  class  of  paper  as  the  other  treasury  notes  and  bank 
notes,  did  circulate  to  a  very  large  extent  as  money. 
The  great  bulk  of  this  had,  however,  been  retired  by 
1869,  leaving  the  stock  of  paper  money  in  the  United 
States  about  $600,000,000  greater  than  in  1861.  Third, 
an  increase  of  nearly  $400,000,000  in  France  from  1869 


128 


HAXD-BOOK    OF    FINANCE. 


to  1873.  Fourth,  an  increase  in  Italy  of  $300,000,000 
from  1861  to  1876.  Fifth,  an  increase  of  probably 
$200,000,000  in  Russia  in  the  last  ten  years.  Besides 
these  greatest  additions,  there  was  an  increase  of  about 
$120,000,000  in  Germany,  and  about  $45,000,000  in 
Great  Britain,  in  the  whole  period,  and  an  increase  in 
Switzerland  of  $11,000,000  to  $12,000,000  from  1870  to 
1873 ;  $12,000,000  in  Belgium  from  1872  to  1873,  etc. 

Annual  Interest.  This  line  has  been  drawn  with 
reference  to  such  events  as  the  civil  war  in  the  United 
States  and  the  Franco- Prussian  war,  concurrent  with 
the  increase  of  railroad  and  municipal  debts. 

The  courses  of  the  lines  in  the  diagram  show  the  fol- 
lowing changes  in  the  percentage  of  money  to  debts,  or 
promises  to  pay  money,  comparing  1845  with  1875,  viz. : 


Percentage  of  gold  and  silver  to  paper  money 

Percentage  of  gold  to  paper  money * 

Percentage  of  aggregate  of  gold  and  silver  to  annual  ) 

interest •  •  -  f 

Percentage  of  gold  to  annual  interest 

Percentage  of  gold  and  silver  to  all  obligations  to  pay 

interest  and  redeem  paper  money 

Percentage  of  gold  to  all  obligations  to  pay  interest  and  ') 

redeem  paper  money i" 


1845. 


200 

75 

140 

68 

600 

260 

225 

131 

160 

90 

56 


1875. 


45 


Showing 

the  Approximate  Amounts  of 
the  Total  Volume 

DIAGR 

&old  and  of  gold  and  h 
of  Paper  Money  in  Eur<! 

For  full  explani! 

Years 

1845 
1846 
1847 
1848 
1849 
1850 
1851 
1852 
1853 
1854 
1855 
1856 
1857 
1858 
1859 
1860 
1S61 
1862 
1863 
1S64 
1865 
1866 
1867 
1868 
1869 
1S70 
1S71 
1872 
1873 
1874 
1S75 
|   1876 

2,100 

2,000 

1,900 

1,800 

1,700 

1,000 

1,500 

1,400 

1.300 

1,200 

1,100 

1,000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

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No.  2. 

er  used  as  Money,  the  Annual  Interest  on  Funded  Debts,  and 
i  and  North  America  each  Year  since  1845. 

n  see  page  127. 


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CHANGES  IN  THE  VALUES  OF  THE  PRECIOUS 

METALS,  AND  THEIR  EFFECTS  ON  PRICES 

OF  COMMODITIES. 


JUST  at  present  the  commercial  and  financial  world 
is  perplexed  with  the  causes  of  what  is  called  the 
"  low  price  of  silver."  Many  are  disposed  to  refer  this 
almost  wholly  to  the  increase  in  the  production  of  the 
metal;  others  more  largely  to  the  demonetization  of 
silver  in  Germany ;  and  still  others  claim  that  the 
decline  in  the  value  of  silver,  while  it  has  been  greatly 
increased  by  the  above  mentioned  causes,  was  primarily 
an  erroneous  expression  for  a  rise  in  the  value  of  gold, 
this  rise  being  shown  not  only  in  the  decline  in  the 
gold  price  of  silver,  but  of  all  commodities. 

One  of  the  most  indisputable  facts  in  connection  with 
the  vast  increase  in  the  production  of  gold  from  1849 
to  1854-5  was  that  it  caused  a  general  "rise  of  prices." 
I  have  made  comparisons  of  the  prices  of  a  number  of 
staple  commodities  in  New  York  city  in  1845  with  those 
in  1854,  and  find  that  the  average  rise  in  that  period 
was  over  50  per  cent  (see  tables  of  prices  at  the  end  of 
the  book).  This  rise  has  been  by  some  attributed  to 
changes  in  the  tariff,  an  assumption  which  I  think  is 
to  a  large  extent  erroneous.  Aside  from  this  there  was 
no  other  feature  of  that  period  to  which  the  rise  could 
be  attributed  than  the  increase  in  the  stock  of  gold  in 
the  world  used  as  money.  Professor  Jevons  compared 
the  average  of  prices  in  1849  with  the  average  in  1865, 


130 


HA^D-BOOK    OF    FINANCE. 


and  concluded  there  had  been  a  rise  of  about  21  per 
cent,  and  his  opinion  was  that  the  real  permanent  rise 
due  to  the  increase  of  gold  was  about  21  per  cent.  1 
do  not  see  how  it  is  possible  to  avoid  the  conclusion, 
after  investigation,  that  this  estimate  of  the  rise  of 
prices  was  too  low,  as  will  be  seen  by  the  following 
table  of  average  prices  of  thirteen  leading  articles  in 
New  York  city  either  about  the  end  of  December,  or 
in  the  first  weeks  of  January  following,  in  each  one  of 
three  years  of  each  period.  Thus,  the  average  price  of 
a  ton  of  iron  in  the  winters  of  1845-6-7  was  $36 ;  in 
the  three  winters  of  1854-5-6  it  was  $33 ;  in  the  three 
winters  of  1873-4-5  it  was  $28.  Coal  and  iron  were 
the  only  exceptions  to  the  general  rise  of  prices.  But 
even  including  these,  the  general  rise  of  prices  in  the 
period  1854-6  over  1845-7  was  58  per  cent. 


AVERAGE  PRICES    OF   LEADING   ARTICLES   AT   THREE   PERIODS    (iN 
NEW  YORK   CITY). 


Articles. 


Quantities. 


Periods. 


Wheat 

Corn 

Coal 

Iron 

Salt 

Fork 

Beef 

Rice 

Sugar  (N.  0.) 

Cheese 

Cotton 

Wool 

Leather 


Averages . 


30  bushels. 

50  bushels . 

6  tons  . . . 

1  ton  ... . 

100  bushels. 

30  barrels  . 

40  barrels  . 

1000  pounds. 

700  pounds. 

500  pounds. 

500  pounds. 

100  pounds. 

200  pounds 


1845-7. 


$32 
34 
30 
36 
27 
33 
29 
33 
33 
30 
35 
27 
28 


1854-6. 


$65 
40 
24 
33 
41 
43 
36 
36 
37 
45 
45 
31 
66 


$49 


1873-5. 

(Gold 

Prices.) 


$36 
36 
31 
28 
28 
50 
40 
63 
50 
60 
70 
44 
48 


VALUES    OF   THE    PRECIOUS    METALS.  131 

Advance  in  1854-6  over  the  average  of  1845-7,  58 
per  cent. 

In  the  period  1873-5  prices  in  gold  were  still  46  per 
cent  above  the  average  of  1845-7. 

It  is  true  New  York  was  not  the  world ;  but  its 
markets  were  governed  by  those  of  the  rest  of  the 
world,  and  after  making  all  due  allowance  for  the  effects 
of  causes  local  to  the  United  States  (the  tariff,  the  influx 
of  emigrants,  etc.),  it  is  difficult  to  avoid  the  conclusion 
that  the  general  rise  of  prices  due  to  the  increase  of 
gold  in  1854-6  was  over  40  per  cent.  The  values  of 
the  precious  metals  can  be  measured  only  by  their  ex- 
changeable value  for  other  commodities,  and  this  gen- 
eral rise  in  the  values  of  commodities  was  the  index  of 
the  depreciation  in  the  value  of  gold  which  Chevalier 
and  others  were  predicting,  but  which  in  fact  had 
already  come  while  they  were  arguing  about  it.  At  the 
latter  date,  with  which  Professor  Jevons  made  his  com- 
parison of  prices,  the  average  product  of  gold  had  de- 
creased $25,000,000  or  $30,000,000  per  annum,  and  the 
excessive  depreciation  of  its  value  was  being  recovered 
by  reason  of  various  causes.  First  of  these  was  the 
vast  increase  of  traffic,  and  the  consequent  necessities 
for  the  metal  as  a  circulating  medium.  Second,  the 
greatly  increased  use  of  gold  in  the  arts.  But  in  1860 
began  a  series  of  events  which  exercised  an  immense 
influence  to  advance  prices  of  commodities,  independent 
of  the  recovery  in  the  value  of  gold.  The  first  of  these 
was  the  war  of  Italian  liberation  in  1860;  next  the  civil 
war  in  the  United  States,  lasting  from  1861  to  1865 ; 
next  the  Austro-Prussian  war  in  1866.  These  three 
wars  caused  an  aggregate  destruction  of  life  and  prop- 
erty in  six  years  scarcely  equaled   by   any  preceding 


132  HAND-BOOK    OF    FINANCE. 

period  of  twenty  years ;  in  fact,  at  the  beginning  of  the 
Italian  war  the  peace  of  Europe  had  not  been  disturbed 
by  any  great  war  since  that  in  the  Crimea,  ending  in 
1856.  These  events  were  the  main  cause  of  a  further 
advance  in  prices  of  commodities,  which  for  a  time 
concealed  the  rising  value  of  gold.  The  waste  of  the 
wars  and  the  diversion  of  industry  had  diminished  the 
stocks  of  commodities,  and  their  prices  rose  in  propor- 
tion for  some  time  after  the  destruction  had  ceased. 
The  decline  in  prices  of  commodities  was  again  deferred 
by  the  Franco-Prussian  war,  ending  in  1871,  the  great- 
est effects  of  which,  however,  were  apparently  overcome 
by  1872-3.  It  was  then  that  the  effects  of  the  dimin- 
ishing stock  of  coin,  the  increase  of  obligations  to  pay 
money,  together  with  the  increasing  stock  of  commodi- 
ties, began  to  show  themselves  in  various  minor  panics 
in  Europe,  preceding  the  culmination,  in  1873,  in  the 
United  States.  From  1867  to  1872  there  had  been  an 
average  decline  in  the  currency  prices  of  all  leading 
commodities  in  New  York  of  from  30  to  35  per  cent 
from  the  prices  of  1867-8.  This,  it  is  true,  was  mainly 
the  effect  of  the  appreciation  of  the  paper  currency 
(which  advanced  from  an  average  value  of  70  cents  on 
the  dollar  in  1867  to  an  average  of  89  cents  in  1872  — 
27  per  cent)  ;  but  I  think  not  wholly.  The  average  of 
prices  in  1875-6  was  about  the  same  as  in  1851-2 ;  but 
this  latter  period  was  before  the  whole  rise  caused  by 
the  increase  of  gold  had  been  experienced.  Prices  had 
been  much  higher  from  1854  to  1860. 

It  will  perhaps  be  said  that  if  the  theory  of  a  depre- 
ciation in  the  price  of  gold  in  the  period  from  1845  to 
1854  was  correct,  it  should  have  been  shown  in  a  rise 
in  the  gold  value  of  silver.     But  this  was  prevented  by 


VALUES    OF   THE    PRECIOUS    METALS.  133 

the  fact  that  at  that  period  silver  was  the  principal 
metallic  currency  of  Europe.  Great  Britain  had  de- 
monetized silver  in  1816,  but  the  great  bulk  of  the 
metallic  currency  of  the  continent  was  silver.  The 
legal  value  of  this  as  compared  with  gold  being  perma- 
nent, the  value  of  silver  as  money  was  tied  to  that  of 
gold,  and  fell  with  it.  Or,  viewing  it  from  the  opposite 
side,  we  may  say  that  the  depreciation  of  gold  was 
greatly  diminished  by  its  fixed  legal  value  relatively  to 
silver.  Had  gold  been  the  exclusive  standard  of  values 
in  1854,  the  rise  in  prices  of  commodities  would  have 
been  twice  as  great.  The  result  of  the  severance  of  the 
two  metals,  by  the  demonetization  in  Germany,  and 
practically  in  France,  at  a  period  when  the  stock  of  gold 
is  diminishing,  has  been  a  decline  in  prices  of  all  com- 
modities— including  silver,  which  has  been  largely 
reduced  in  some  countries  to  the  condition  of  a  com- 
modity. 

The  demonetization  of  silver  is  not,  of  course,  the 
sole  cause  of  the  decline  of  prices  in  the  last  four  years. 
The  vast  load  of  war  debt  accumulated  in  Europe  and 
the  United  States  from  1860  to  1871  was  steadily  in- 
creasing the  rates  of  interest  for  money.  During  that 
period  the  United  States,  Italy,  Austria  and  France 
were  in  the  market  for  enormous  sums.  The  capital  or 
wealth  which  they  borrowed  was  destroyed  in  the  wars, 
but  the  taxes  were  increased  to  pay  high  rates  of 
interest  on  what  no  longer  existed,  and  therefore  was 
no  longer  the  means  of  increasing  the  wealth  of  the 
world.  The  difference  between  the  effects  of  the 
agencies  which  have  produced  the  railroad  debts  and 
those  which  have  produced  the  war  debts  is  apparent. 
The  former  class  represents  something  that  is  still  in 


134  HAND-BOOK   OF   FINANCE. 

existence  and  operating  to  aid  in  the  creation  of  the 
wealth  to  pay  interest  on  the  principal.  The  latter 
represents  something  that  has  been  annihilated,  the  loss 
not  being  felt  at  once,  but  deferred  and  distributed  over 
a  number  of  years  in  the  taxation  to  pay  interest.  It 
was  this  which,  about  1872,  began  to  make  an  increas- 
ing demand  for  the  precious  metals  to  reimburse  capi- 
talists for  the  cost  of  the  wars.  Philosophers  may  argue 
that  gold  and  silver  are  only  measures  of  values,  and 
that  one  dollar  of  gold  will  measure  a  thousand  dollars' 
vjorth  of  commodities  as  well  as  one,  but  it  is  also  true 
that  the  desire  for  the  actual  possession  of  anything  that 
seems  to  be  getting  scarce  imparts  to  it  an  adventitious 
and  phenomenal  value.  Such  was  the  case  in  1872-3, 
when  capitalists  began  to  doubt  the  ability  of  the  nations 
to  pay  the  greatly  increased  load  of  annual  interest.  It 
was  this  doubt  which  caused  the  first  reaction,  and  the 
reaction  once  started,  the  cause  reproduced  itself  and 
acquired  momentum  as  it  progressed.  The  first  cause 
of  the  great  reaction  in  1873  was  the  immense  load  of 
war  debts,  but  this  has  unquestionably  been  greatly 
aggravated  in  the  last  two  years,  and  more  especially  in 
1876,  by  the  demonetization  of  silver. 

The  conclusion,  then,  is  that  the  "decline  in  the  value 
of  silver"  is  in  fact  almost  wholly  the  result  of  an 
equal  divergence  in  the  values  of  the  two  metals.  The 
diminished  stock  of  metallic  money  available  in  Europe, 
resulting  from  the  demonetization  of  silver,  has  en- 
hanced the  value  of  gold  and  diminished  the  value  of 
silver.  Both  metals  have,  for  centuries,  been  main- 
tained at  an  average  value  as  money  far  above  their 
intrinsic  value  as  commodities.  Money  must  be  not 
only  a  standard  of  values,  but  a  circulating  medium. 


VALUES    OF   THE    PRECIOUS    METALS.  135 

Either  increased  use  or  diminished  supply  may  cause  a 
rise  in  the  value  of  the  thing  used.  Hence,  if  the  work 
of  $4,000,000,000  of  gold  and  silver  be  delegated  to 
$2,000,000,000  of  gold,  the  gold  will  rise  in  value  and 
the  silver  will  depreciate.  I  conclude,  therefore,  that 
the  change  in  the  relative  values  of  the  two  metals  is 
due  to  the  demonetization  of  silver ;  and  that  if  gold, 
instead  of  silver,  had  been  demonetized  by  Great 
Britain  and  Germany,  the  value  of  gold  would  have 
fallen  and  that  of  silver  would  have  appreciated. 

In  March,  1876,  a  select  committee  was  appointed  by 
the  British  Parliament  "to  consider  and  report  upon 
the  causes  of  the  depreciation  of  the  price  of  silver." 
The  committee  immediately  began  its  inquiries  and 
continued  them  about  one  month,  during  which  the}^ 
held  six  sessions,  and  called  in  for  examination  the  fol- 
lowing persons :  Messrs.  Henry  Waterfield,  Sir  Hector 
Hay,  Stewart  Pixley,  Robert  Giften,  Frederick  G.  Wil- 
kin s,  Patrick  Campbell,  Robert  Wigrain  Crawford, 
Gustavus  Peitsch,  Samuel  Seldon,  "William  Robinson, 
Colonel  Henry  Hyde,  J.  T.  Mackenzie,  Ernest  Seyd 
and  Walter  Baghot,  all  persons  of  high  repute  in  mat- 
ters of  statistics  relating  to  money  and  finance.  The 
report  of  the  committee,  printed  in  July,  made  a  large 
folio  volume  of  two  hundred  pages,  equal  to  probably 
fifteen  hundred  pages  of  an  ordinary  12mo  book,  and 
containing  an  enormous  mass  of  figures  and  estimates 
in  the  papers  put  in  by  the  witnesses. 

The  substance  of  the  information  on  the  question 
under  consideration  was,  however,  summed  up  in  the 
following  few  paragraphs  on  page  rv  of  the  committee's 
report,  viz. : 

"  Your  committee  are  of  the  opinion  that  the  evi- 


136  HA^D-BOOK    OF    FINANCE. 

"  deuce  taken  conclusively  shews  that  the  fall  in  the 
"  price  of  silver  is  due  to  the  following  causes : 

"  (1)  To  the  discovery  of  new  silver  mines  of  great 
"  richness  in  the  State  of  Nevada. 

"  (2)  To  the  introduction  of  a  gold  currency  into 
"  Germany  in  place  of  the  previous  silver  currency. 
"  This  operation  commenced  at  the  end  of  1871. 

"  (3)  To  the  decreased  demand  for  silver  for  export 
"  to  India. 

"  (4)  That  the  Scandinavian  governments  have  also 
"  substituted  gold  for  silver  in  their  currency. 

"  (5)  That  the  Latin  union,  comprising  France,  Bel- 
"  gium,  Switzerland,  Italy  and  Greece,  have  since  1874 
"  limited  the  amount  of  silver  to  be  coined  yearly  in 
"  the  mints  of  each  member  of  the  union,  suspending 
"  the  privilege  formerly  accorded  to  all  holders  of  silver 
"  bullion  of  claiming  to  have  that  bullion  turned  into 
"  coin  without  restriction. 

"  (6)  That  Holland  has  also  passed  a  temporary  act 
"  prohibiting,  except  on  account  of  the  government,  the 
"  coining  of  silver,  and  authorizing  the  coining  of  gold." 

"  It  will  be  observed  that  two  sets  of  causes  have  been 
"  simultaneously  in  operation.  The  increased  produc- 
"  tion  of  the  newly-discovered  mines  and  the  surplus 
"  thrown  on  the  market  by  Germany,  have  affected  the 
"  supply.  At  the  same  time  the  decreased  amounts 
"  required  for  India  and  the  decreased  purchases  of  sil- 
"  ver  by  the  members  of  the  Latin  union,  have  affected 
"  the  demand.  A  serious  fall  in  the  price  of  silver  was 
"  therefore  inevitable." 

"  It  is,  however,  an  important  and  remarkable  fact,  to 
"  which  it  may  be  convenient  to  call  attention  at  once, 
"  that  though  the  increased  production  of  silver  in  the 


VALUES    OF   THE    PRECIOUS    METALS.  137 

"  United  States  is  a  fact  beyond  question,  no  increase 
"  of  imports  of  silver  from  the  United  States  to  Great 
"  Britain  has  taken  place  since  the  year  1873,  when  the 
"  average  price  of  silver  was  still  o9^d.  per  ounce. 
"  Indeed  the  amount  of  the  imports  of  silver  into  Great 
"  Britain  from  the  United  States  for  the  year  1875,  viz. : 
"  £3,092,000,  is  the  smallest  since  the  year  1869.  In 
"  the  same  way,  though  the  new  currency  laws  of  Ger- 
"  many  affected  a  vast  silver  coinage,  the  sales  of  silver 
"  actually  made  up  to  the  26th  of  April  in  the  present 
"  year  do  not  appear  to  have  exceeded  £6,000,000  dis- 
"  tributed  over  several  years.  Your  committee,  in 
"  pointing  to  these  circumstances,  are  far  from  saying 
"  that  the  impression  produced  on  the  minds  of  the 
"  dealers  in  silver  was  not  justified  by  the  causes  in 
"  operation." 

It  will  be  seen  that  of  the  "six  causes"  enumerated 
by  the  committee  as  operating  to  depreciate  the  value 
of  silver,  four  are  really  the  same  thing,  viz. :  the  move- 
ment in  Europe  by  Germany,  leading  the  Scandinavian 
States,  to  demonetize  silver.  The  decreased  demand  for 
silver  for  export  to  India  seems  to  be  rather  one  of  the 
results  of  the  original  decline  caused  by  the  demonetiza- 
tion, than  an  independent  cause.  The  discovery  of  new 
mines  in  Nevada,  mentioned  by  the  committee  as  the 
first  cause,  is  acknowledged  to  be  only  a  source  of  appre- 
hension, but  not  yet  of  any  increased  supply  of  silver. 

It  is  admitted,  even  by  those  who  have  at  times 
advocated  an  exclusive  gold  standard,*  that  it  is  impos- 

*  Probably,  if  tbere  were  gold  enough  for  all  the  world,  it  would  be  beet  that 
there  should  be  only  a  single  standard  of  value  throughout  the  world,  and  that 
one —  gold.  But  this  is  impossible.  Some  have  doubted  whether  there  is  gold 
enough  even  for  the  nations  which  now  intend  to  use  it;  and  there  certainly  ib 
not  enough  for  all  the  world.— London  Economist. 


138  HAXD-BOOK    OF    FINANCE. 

sible  for  all  nations  to  have  the  exclusive  gold  standard. 
The  unavoidable  result,  therefore,  of  the  adoption  of 
the  exclusive  gold  standard  by  a  few  of  the  leading 
nations  possessing  the  financial  preponderance  of  the 
world  is  to  compel  the  remaining  nations  to  practically 
adopt  silver  alone.  But  at  the  same  time  the  demone- 
tization of  silver  by  a  few  leading  commercial  nations 
depreciates  the  metallic  currency  and  the  money  obliga- 
tions of  the  nations  using  silver  as  a  standard  of  values. 
This  disorganizes  international  trade  and  is  a  direct 
blow  at  all  international  relations.*  The  divergence  in 
the  respective  values  of  the  two  metals  is  the  measure 
of  the  divergence  of  national  interests.  The  tendency 
of  all  this  is  to  diminish  the  intercourse  of  nations  and 
remand  the  world  to  the  old  narrow  ideas  of  the  neces- 
sary antagonism  of  the  people  of  different  countries. 

The  original  establishment  by  law,  in  Great  Britain, f 
France  and  the  United  States,  that  the  legal  values  of 

*  The  London  Economist  described  the  effects  on  the  East  India  trade  of  the 
decline  in  the  value  of  silver,  in  the  first  two  months  of  1876,  as  follows,  viz. : 

The  consequence  of  the  low  value  of  silver  is  that  the  rate  of  exchange  (in 
Calcutta)  is  now  Is.  9d.  lfar.  per  rupee  (or  less),  the  lowest  or  almost  the  lowest 
ever  known.  And  this  operates  as  a  direct  discouragement  to  ship  goods  to 
India.  These  goods  are  paid  for  in  rupees,  and  when  the  merchant  wants  to 
bring  home  those  rupees  to  England  he  finds  that  they  do  not  go  so  far  as  they 
used  to  do.  He  has  to  pay  much  more  for  every  £1,000  bill  on  England,  and 
this  extra  cost  destroys  or  diminishes  his  profit. 

If  new  silver  should  still  continue  to  come  into  market  the  same  process 
must  go  on.  The  first  step  must  be  incessantly  repeated.  The  value  of  the 
rupee  must  fall  as  against  sterling  money ;  instead  of  being  Is.  9d.  it  may  fall 
to  Is.  6d. 

The  Indian  revenue  is  received  in  silver,  and,  therefore,  the  less  far  silver 
goes  in  buying,  the  poorer  will  the  Indian  government  be.  And  this  is  of  more 
instant  importance  to  the  Indian  government  than  almost  any  other,  because 
its  foreign  payments  exceed  those  of  most  governments,  and  those  payments 
are  made  in  gold.  It  has  to  pay  interest  in  gold  on  a  very  large  debt  in  England, 
to  pay  home  salaries,  maintain  home  depots,  and  buy  English  goods  and  stores 
all  in  gold;  and  the  less  valuable  silver  is  in  comparison  with  gold,  the  less 
effectual  for  these  necessary  purposes  will  the  Indian  revenue  be. 

t  Abrogated  in  Great  Britain  by  the  law  of  1816. 


VALUES    OF   THE    PRECIOUS    METALS.  139 

gold  and  silver  should  be  as  1  of  gold  to  15-J  of  silver, 
was  the  result  of  nearly  two  hundred  years'  observation 
of  the  following  facts,  viz.,  that  the  intrinsic  value  of 
each  metal  as  a  commodity,  aside  from  its  uses  as  cur- 
rency or  money,  was  continually  fluctuating  in  accord- 
ance with  the  increase  or  decrease  of  its  production,  but 
that  this  increase  or  decrease  of  production,  and  con- 
sequent increase  or  decrease  of  value,  was  never  the 
same  in  both  metals  at  the  same  time.  The  experience 
was  that  when  the  production  of  gold  had  diminished, 
that  of  silver  had  either  remained  stationary  or  in- 
creased, and  vice  versa.  There  was  no  theory  to  show 
that  this  should  necessarily  be  the  case,  but  such  was 
and  had  been  the  fact  for  over  two  hundred  years.  In 
order  to  prevent  wide  fluctuations  in  the  standard  of 
values,  it  was  sought  to  establish  a  bond  between  the 
values  of  the  two  metals,  so  that  the  diminishing  value 
of  the  one  might  be  checked  by  either  the  stationary  or 
the  increasing  value  of  the  other.  Experience  had 
shown  that  the  average  commercial  value  of  silver  had 
been  as  15^  of  silver  to  1  of  gold,  and  that  though 
either  one  might  temporarily  change  in  value  so  as  to 
change  this  relative  value,  it  would  certainly  come  back 
to  it  sooner  or  later  if  both  metals  vjere  equally  used  as 
money.  As  previously  remarked,  the  values  of  both 
metals  is  to  a  very  large  extent  fictitious ;  there  is  no 
other  use,  than  as  money,  that  would  warrant  more  than 
one-fourth  the  present  values  of  either  gold  or  silver. 
The  depreciation  of  29  in  the  100  of  the  value  of  silver 
(or  the  increase  of  41  per  cent  in  the  value  of  gold, 
whichever  one  may  choose  to  call  it)  which  took  place 
from  October,  1874,  to  July,  1876,  mainly  as  the  result 
of  the  demonetization  of  silver  by  Germany,  proves  it. 


140  HAND-BOOK   OF    FINANCE. 

It  was,  therefore,  to  prevent  fluctuations  in  the  standard 
of  values  that  the  two  metals  were,  so  to  speak,  "  yoked 
together  "  by  the  legal  establishment  of  their  values  as 
permanent  at  15|-  to  1.  It  was  believed,  and  experience 
has  proven,  that  if  both  metals  were  equally  used  as 
money,  this  relative  valuation  was  the  point  from  which 
there  would  be  the  least  departure.  During  the  dis- 
cussions of  this  subject  in  Congress  (1875-6)  there 
seemed  to  be  a  disposition  on  the  part  even  of  the 
advocates  of  the  double  standard  to  change  the  relative 
legal  values  of  gold  and  silver  by  the  coinage  of  a 
larger  silver  "dollar,"  as  compared  with  the  gold  "dol- 
lar." But  any  departure  from  the  standard  of  15-J  to  1 
is  the  same  in  principle  —  only  less  in  degree  —  as  the 
complete  demonetization  of  either  of  the  metals.*  To 
meddle  once  with  a  rule  established  by  the  experience 
of  centuries,  only  makes  the  necessity  of  meddling 
again  at  some  future  time. 

The  following  table  is  from  the  annual  report  for 
1875  of  the  United  States  Commissioner  of  Mining 
Statistics : 

*  The  law  of  April,  1792,  provided  that  the  ratio  of  gold  to  silver  in  all  coins 
current  as  money  in  the  United  States  ''shall  be  as  " fifteen  to  one"  and  for  40 
years  the  silver  dollar  of  the  United  States  was  of  that  proportional  value.  But 
by  the  reduction  in  weight  of  the  gold  coins  the  ratio  was  increased  to  16  to  1. 
The  subsequent  laws  regulating  the  values  of  coins  had  changed  this  to  15.988 
to  1  in  1837,  which  continued  to  be  the  ratio  until  the  coinage  of  the  trade  dollar 
under  the  law  of  February,  1873,  made  it  16.27  to  1. 


VALUES    OF   THE    PRECIOUS    METALS. 


141 


RELATIVE  AVERAGE  ANNUAL  VALUES   OP   GOLD  AND   SILVER. 


Date.       Ratio. 


Authority. 


1526 


11.30 


1543 

11.10 

1561 

11.70 

1575 

11.68 

1551 

11.17 

1559 

11.44 

1604 

12.10 

1612 

13.30 

1619 

13.35 

1623 

1174 

1640 

13.51 

1665 

15.10 

1667 

14.15 

1669 

15.11 

1*.70 

14.50 

1679 

15.00 

1680 

15.40 

1687 

-1700 

14.97 

1701 

-1720 

15.21 

1721 

-1740 

15.08 

1741 

-1790 

14.74 

1791 

-1800 

15  42 

1801 

-1810 

15.61 

1811 

-1820 

1551 

1821 

-1830 

15.80 

1831 

-1810 

15  67 

1841 

-1850 

15.83 

1851 

15.46 

1852 

15.57 

1853 

15.33 

1854 

15.33 

1855 

15.36 

1856 

15.33 

1857 

15.27 

1858 

15.36 

1859 

15.21 

1860 

15.30 

1861 

15.47 

1862 

15.36 

1863 

15.38 

1864 

15.40 

1865 

15.33 

1866 

15.44 

1867 

15.57 

1868 

15.60 

1869 

15.60 

1870 

15.60 

1871 

15.59 

1872 

15.63 

1873 

15.90 

1874 

16715 

J  Apparent  relation  of  market-value,  as  deduced  from  the 
V  British  mint-regulations,  some  absurd  and  unsuccessful 
)     experiments  in  coinage  being  disregarded. 

[-French  mint-regulations. 

[■  German  imperial  mint-regulations. 

>  British  mint-regulations  —  experiments  disregarded. 

Upper  German  regulations. 
French  mint-regulations. 

Upper  German  regulations. 
British  regulations. 
French  regulations. 

Ratios  calculated  from  the  bi-weekly  quotations  of  the 
Hamburg  prices-current,  giving  the  value  of  the  gold 
ducats  of  Holland  in  silver  thalers,  down  to  1771,  and, 
after  that,  in  fiue  silver  bars.  The  nominal  par  of  ex- 
change during  this  period  was  1 :  14.80;  and  the  quotations 
show  the  variations  of  the  market  rate  in  percentage 
above  or  below  this.  At  par.  6  silver  marks-banco  were 
equivalent  to  one  ducat,  68  20-47  ducats  containing  one 
mark  (weight)  of  fiue  gold,  and  27%  silver  marks-banco 
containing  one  mark  (weight)  of  fine  silver.  Hence, 
6X68  20-47^-27^  =  14.80,  the  par  ratio. 

The  London  quotations.  These  give  the  price  of  a  given 
weight  of  standard  silver  in  shillings  and  pence  sterling. 
Bearing  in  mind  that  there  is  in  Great  Britain  no  charge 
for  coinage,  and,  hence,  that  the  price  referred  to  varies 
exactly  as  the  market-value  of  the  metals,  we  can  calcu- 
late the  ratio  as  follows:  The  standard  gold  is  14-  fiue» 
and  its  value  is  fixed  at  77s.  lOftd.,  or  934.5  pence  per 
ounce  troy.     Hence  the  value  of  an  ounce  of  fine  gold  is 

4-2.  of  this  sum,  or  1019.45  pence.      The  standard  silver, 

on  the  other  hand,  is  4-X  fine;  hence  an  ounce  of  fine 

4  0 
silver  is  won  hi. 081  times  as  much  as  an  ounce  of  standard 
silver  If  the  fixed  value  of  an  ounce  of  fine  gold  be  divided 
by  1  081  times  the  quoted  price  of  an  ounce  of  standard 
silver,  the  quotient  is  the  ratio  desired.  Thus,  if  x  be 
L  _  .  1019.45  943 
the  quoted  price  per  ounce  in  pence,  — - —  = 

1    ,    I)   O    1    H1  CC 

(very  nearly)  is  the  ratio.  Briefly,  dividing  943  by  the 
price  in  pence  of  an  ounce  of  standard  silver  gives  the 
ratio  correctly  to  the  second  decimal  place.  London 
being  the  acknowledged  center  of  the  commercial  world, 
this  ratio  determines  the  relative  value  of  the  metals 
amonsr  civilized  nations. 
The  table  shows  annual  averages  only.  The  lowest  monthly 
value  of  gold  was  15.12  in  May,  1859,  and  the  highest 
16  35.  in  October,  1874.  The  annual  average  for  1874  here 
given  is  calculated  upon  the  prices  of  eleven  months, 
ending  November  30. 


142 


HAND-BOOK    OF    FINANCE. 


The  foregoing  table  only  gives  average  annual  values  ; 
but  in  order  to  show  the  fluctuations  caused  by  the  in- 
crease of  gold  from  1848  to  1853-5,  and  also  the  much 
greater  ones  caused  by  the  demonetization  of  silver  in 
Germany,  I  have  made  the  following  table,  showing  the 
per  cent  of  premium  on  each  of  the  metals  as  expressed 
in  the  value  of  the  other  at  various  periods : 


Time. 


1821  to  1830,  average. 
1851,  average  of  year. 
1857,    "     "   . 

1859,  May 

1863,  year 

1874,  October 

1875,  January 

1875,  July 

1876,  January 

1876,  July 


15.80  to  1 
15.46  to  1 
15.27  to  1 
15.12  to  1 
15.33  to  1 
16.35  to  1 
16.45  to  1 
16.97  to  1 
17.08  to  1 
22.54  to  1 
1876,  September I  18.84  to  1 


Ratio  of 
Silver  to  Gold 
in  the  Lon- 
don Market. 


Premium  on 

Silver 
over  15^  to  1. 


.25  per  cent 
1.50 
2.45 
1.00 


Premium  on 

Gold 
over  1  to  15H- 


1.93  per  cent 


4.84  per  cent 

5.48 

9.48 
10.18 
45.28 
21.54 


EXPLANATION  OF  DIAGRAM  No.  3. 


In  diagram  Ko.  3  I  have  endeavored  to  make  ap- 
parent what  has  been  the  progress  of  the  values  of  the 
precious  metals  as  compared  with  the  values  of  com- 
modities, and  the  principal  causes  which  have  at  different 
times  affected  the  values  of  each,  the  varying  difference 
between  the  lines  being  what  is  understood  as  the 
"rising  or  falling  of  prices." 

The  upper  line  in  the  diagram  —  the  line  of  dashes 
—  begins  with  prices  at  what  might  be  called  "zero" 
in  1845  to  1847;  the  rise  of  the  line  through  1851-2-3- 


DIAGA 

Showing  the  Fluctuations  in  the  Values  o 

Explanation— -The  upper  line  (thus  —  —  — )  in  the  diagrc 
The  two  lower  lines  represent  the  values  of  gold  and  silver  as  coidi 
variations  in  the  space  between  the  upper  line  and  the  two  lower  lii  i 
the  prices  of  1845-7.     For  further  explanation  see  page  142 


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M  No.  3. 

'OMMODITIES   AND   OF   GOLD   AND    SlLVER   SINCE   1840. 

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VALUES   OF   THE    PRECIOUS    METALS.  143 

4-5  indicates  the  increased  demand  for  and  consump- 
tion of  all  sorts  of  commodities  incident  to  the  gold 
hunting  fever  which  prevailed  throughout  the  world. 
The  great  rise  from  1860  to  1867  was  largely  the  effect 
of  the  general  progress  of  civilization  and  the  general 
increase  in  the  scale  of  expenditure  in  social  life.  But 
of  the  special  events  which  increased  the  demand  for 
and  values  of  commodities,  the  four  great  wars  men- 
tioned were  the  most  potent.  These  were  the  causes 
which  operated  to  increase  the  values  of  commodities 
independent  of  the  increase  or  decrease  of  the  stock 
of  precious  metals.  These  created  a  demand  for  new 
articles,  viz. :  munitions  of  war,  and  diverted  labor  from 
its  usual  employments  to  supply  them ;  the  result  being 
an  increased  demand  for  labor,  and  consequently  an 
increased  cost.  The  demand  for  labor  continued  tem- 
porarily after  the  wars  to  supply  the  waste  incident  to 
them.  But  this  being  done  there  was  no  longer  so 
much  employment,  the  supply  of  commodities  became 
excessive,  resulting  in  a  decline  of  prices  and  of  the 
wages  of  labor.  (The  "rise  of  prices''  indicated  at 
this  period  refers,  of  course,  to  prices  in  gold  —  the 
rise  in  currency  prices  was  much  greater.) 

But  now  taking  the  two  lower  lines,  the  continuous 
one  representing  the  value  of  gold  as  compared  with 
the  values  of  commodities,  and  the  dotted  one  repre- 
senting the  value  of  silver  as  compared  to  gold  and 
also  to  the  values  of  commodities,  we  see  a  great  de- 
scent in  the  lines  of  both  from  1850  to  1855-6.  Silver 
declined  because  its  value  was  "  tied  to  the  value  of 
gold  "  by  the  laws  then  in  force  in  the  United  States, 
France,  and  practically  in  the  greater  part  of  Europe, 
making  one  ounce  of  gold  legally  equal  to  from  fourteen 


144 


HAND-BOOK    OF    FINANCE. 


to  sixteen  of  silver.*  Silver  being  the  money  of  nearly 
all  Europe,  its  value  sustained  the  value  of  gold,  and 
prevented  a  much  greater  decline. 

The  whole  difference  between  these  values  of  the 
precious  metals  and  the  values  of  commodities  was 
called  "  the  rise  of  prices." 

*  The  following  table  shows  the  relative  legal  values  of  gold  and  silver  in 
the  coinage  systems  of  various  countries: 

RELATIVE   VALUES  OP  GOLD  AND   SILVER  IN  THE  COINAGE   SYSTEMS   OP  COUNTRIES 
OP   THE   GOLD    STANDARD. 


Country. 

Kelative  Coins. 

Pure  Metal. 

Relative 

Gold. 

Silver. 

Gold. 

Silver. 

Value. 

peso. 

pound. 

pound. 

mark. 

1,000  reis 

crown. 

dollar. 

dollar. 

%  peso, 
piaster, 
shilling, 
mark. 
500  reis. 
crown, 
subsid'y 
trade  dol 

Grains. 
22.49 
115.5 
113.001 
5.531 
25.087 
6.225 
23.22 
23.22 

Grains. 

141.009 
14.298 
80.727 
77.16 

176.824 
92.392 

347  24 

378.00 

1  to  12^4 

Egypt 

1  to  12  3 
1  to  14.2 

1  to  13. 

1  to  14. 

Scandinavian  Union 

1  to  14.8 
1  to  14.52 

1  to  16.27 

RELATIVE  VALUES  OF  GOLD  AND   SILVER  IN  THE  COINAGE   SYSTEMS   OP   COUNTRIES 
OP  THE   SILVER   STANDARD. 


Country. 

Relative  Coins. 

Pure  Metal. 

Gold.        Silver. 

Gold. 

Silver. 

Value. 

! 

gulden.    J  florin, 
peso.       1  peso, 
gulden.      florin. 
5  rubles,    ruble. 

Grains. 
11.2006 
22.8477 
9.3332 
92.5713 

Grains. 

171.466 

377.1718 

145.8324 

277.7158 

1  to  15^ 
1  to  16*4 
1  to  15^" 

Mexico* 

1  to  14% 

*  These  countries  issue  a  gold  coin  for  commercial  or  trade  purposes. 

RELATIVE  VALUES  OP  GOLD  AND   SILVER  IN  THE  COINAGE   SYSTEMS   OP  COUNTRIES 
OP  THE  DOUBLE   STANDARD. 


Country. . 

Relative  Coins. 

Pure  Metal. 

Relative 

Gold. 

Silver. 

Gold. 

Silver. 

Value. 

Latin  Union  includes  Bel- 
gium, France,  Italy   and 
Switzerland 

5  francs . 

5  francs. 

22.4012 

347.22 

1  to  15H 

The  "Latin  Monetary  Union,"  mentioned  in  the  foregoing  table,  was  a  con- 
vention ratified  at  Paris,  December  23,  1865,  between  the  governments  named, 


VALUES    OF   THE    PRECIOUS    METALS.  145 

But  the  value  of  gold  began  to  rise  with  the  increase 
of  traffic  and  debts.  The  change  in  the  money  standard 
of  Great  Britain  to  one  of  gold  alone  in  1816  had  as 
yet  produced  but  little  effect  on  the  world  at  large. 
But  as  great  debts  increased,  and  as  immense  sums 
began  to  be  negotiated  in  London,  this  law  of  1816 
began  to  operate  to  increase  the  demand  for  gold  to  pay 
interest  in  the  only  metal  that  England  recognized  as 
the  standard  of  values.  The  evidence  of  this  advance 
in  the  value  of  gold  is  in  the  fact  that  it  soon  rose  above 
that  of  1  to  15-J-  of  silver.  The  lines  of  the  two  metals, 
as  shown  in  the  diagram,  had  crossed  each  other  about 
1850,  and  now  again  they  crossed  about  1862,  indicating 
that  the  "  golden  era  "  had  ended,  and  that  the  "  era  of 
golden  debt "  had  begun.  The  success  of  Germany  in 
the  war  with  France  gave  the  former  the  means  of 
attempting  to  follow  in  the  footsteps  of  England.  Ger- 
many  demonetized    silver,    and    depended   upon    the 

this  convention  constituting  the  governments  into  a  union  for  the  purpose  of 
establishing  a  uniform  system  of  weights,  measures  and  valuations  and  forma 
of  currency. 

The  governments  (Art.  2)  contracted  not  to  coin  any  gold  moneys  in  any 
other  denominations  of  coins  than  1,000  francs,  50  francs,  20  francs,  10  francs 
and  5  francs,  at  the  ratio  of  1.612.90  grammes  of  standard  gold  (9-10  fine)  to  each 
5  francs. 

Silver  coins  of  the  denomination  of  2  francs  (or  less)  were  made  a  legal 
tender  between  individuals  in  the  state  that  coined  the  silver  for  sums  of  50 
francs;  but  in  payments  from  individuals  to  the  state  which  issued  the  silver 
the  coins  were  made  legal  tender  in  any  sum.  It  was  provided  that  the  national 
treasuries  of  the  several  countries  should  accept  silver  coined  by  any  of  the 
other  states  in  the  union  to  the  extent  of  100  francs.  The  convention,  however, 
fixed  the  limit  of  total  coinage  of  silver  during  the  continuation  of  the  union  to 
its  expiration  in  1880.  The  amount  allowed  to  be  coined  by  each  country  for 
1876  has  been  stated  as  follows,  viz.: 

Francs. 

France 54.000,000 

Italy 36.000,000 

Belgium 11,000,000 

Switzerland 7,000,000 

108,000.000 

7 


146  HAND-BOOK    OF   FINANCE. 

$1,000,000,000  she  was  to  get  from  France  as  a  war 
penalty,  for  the  means  of  substituting  gold  for  about 
$300,000,000  to  $400,000,000  of  her  silver  currency. 
France  was  not  only  obliged  to  borrow  gold  of  all  the 
surrounding  nations,  but  to  hoard  all  she  could  to  avoid 
being  obliged  to  accept  a  metallic  currency  of  silver 
which  had  become  depreciated  by  the  operation  of  the 
laws  of  England  and  Germany.  Thus  the  appreciation 
of  gold  went  on,  but  even  yet  was  to  a  considerable 
extent  held  down  by  the  use  of  silver  in  the  larger  part 
of  Europe ;  but  with  the  beginning  of  1876,  when  the 
new  laws  in  Germany  went  into  full  operation,  and 
Germany  began  to  sell  off  about  $250,000,000  of  silver, 
the  two  metals  parted  company.  Silver  declined  until 
in  July,  1876,  it  was  nominally  quoted  as  low  as  46 
pence  per  ounce,  and  gold  was  left  as  the  only  measure 
of  values  in  the  leading  commercial  countries  of  Europe, 
Great  Britain,  France  and  Germany.  Debts  and  the 
interest  on  them  are  payable  in  those  countries  only  in 
gold.  In  the  United  States  they  have  been  made  pay- 
able (by  the  coinage  law  of  February,  1873,)  in  promises 
to  pay  gold,  viz. :  in  United  States  treasury  notes.  Thus 
this  increased  demand  for  gold,  present  and  prospective, 
(made  prospective  in  the  United  States  by  the  specie 
resumption  act  of  January,  1875,)  has  increased  its 
value.  Debts  are  paid  with  commodities,  but  not  until 
the  commodities  have  been  exchanged  for  money  —  gold. 
The  decline  of  prices  since  1872-3  is  explained  by  the 
increased  value  of  gold.  The  first  effect  was  to  cause  a 
collapse  in  "  speculative  securities,"  viz. :  bonds  of  rail- 
roads, etc.,  which  were  based  on  the  expectation  of  a 
continuance  of  high  prices  for  commodities,  or  in  other 
words,  a  low  value  for  gold.     The  losses  which  followed 


VALUES    OF   THE    PRECIOUS    METALS.  147 

caused  panic  and  a  decrease  in  manufacturing  industry 
and  improvement  enterprises.  This  diminished  em- 
ployment for  labor  and  necessarily  decreased  the  con- 
sumptive demand  for  all  commodities.  This  again 
caused  still  further  cessation  of  industry  and  a  further 
decrease  of  demand  for  commodities.  Theorists  have 
been  jangling  for  three  years  about  the  cause  of  the 
reaction  which  began  in  1872-3,  and  the  decline  of 
prices  which  has  continued  almost  without  interruption 
since.  These  causes  are,  however,  not  obscure.  The 
progress  of  the  physical  sciences  and  of  labor-saving 
inventions  has  undoubtedly  had  an  important  tendency 
to  reduce  the  prices  of  nearly  all  manufactured  articles 
and,  to  a  small  extent  also,  the  values  of  raw  materials. 
But  the  increased  burden  of  debt,  the  increase  of  traffic 
(thus  requiring  a  larger  volume  of  the  circulating 
medium),  and  the  demonetization  of  silver,  have  all 
contributed  to  increase  the  value  of  gold  beyond  its 
equitable  value  as  a  measure  for  values  of  commodities. 
The  era  of  golden  debt,  like  the  era  of  gold,  lias  had 
its  culmination,  and  the  causes  at  work  now  are  prepar- 
ing the  way  for  some  new  era  in  financial  affairs  which 
will,  in  all  probability,  be  as  unique  as  either  of  the 
two  which  have  preceded  it.  No  man  can  yet  foresee 
what  it  is  to  be.  It  is,  however,  not  difficult  to  distin- 
guish a  few  tendencies  that  must  continue  to  operate 
toward  the  new  development.  The  first  of  these  is 
the  decline  in  the  rates  of  interest  for  money  in  order 
to  reduce  the  burden  of  funded  and  mortgage  debt 
everywhere.  This  will  be  accomplished  partly  by  the 
repudiation  and  complete  loss  of  a  very  large  portion 
of  the  existing  volume  of  funded  debts,  and  partly  by 
the  concentration  of  capital  (seeking  safety  rather  than 


148  HAND-BOOK    OF   FINANCE. 

high  rates  of  interest)  on  a  smaller  amount  of  debt. 
Another  tendenc}'  that  must  continue,  is  the  necessity 
for  supplementing  the  stock  of  gold  in  the  world  with 
the  stock  of  silver,  and  a  universal  recognition  of  both 
metals  as  money  at  about  the  same  relative  values  they 
maintained  prior  to  the  era  of  gold.  Until  these  things 
are  accomplished,  "  prices  "  will  continue  to  decline  and 
the  commercial  world  will  be  in  distress.  A  great  war 
in  Europe  would  afford  temporary  relief  by  creating  an 
extra  demand  for  commodities,  partly  as  munitions  of 
war  and  partly  to  supply  new  stocks  in  place  of  those 
destroyed.  But  this  would  neither  reduce  the  burden 
of  interest  on  funded  debts  nor  increase  the  stock  of  gold 
or  silver,  nor  in  any  way  decrease  the  demand  for  the 
precious  metals.  On  the  contrary,  some  nations  would 
be  obliged  to  pay  interest  in  gold  on  the  cost  of  the 
war,  viz. :  the  value  of  the  property  destroyed  and  the 
industry  diverted  from  its  proper  channels.  Thus  while 
a  great  war  would  temporarily  cause  a  rise  in  prices,  this 
would  only  be  a  reason  for  their  ultimately  declining 
to  a  lower  point  than  before  the  war.  Financiers  and 
statesmen  have  taken  an  exceedingly  narrow-minded 
view  of  this  era  of  debt.  While  they  have  not  failed 
to  call  attention  to  the  magnitude  of  debt,  it  has  only 
been  in  a  tone  of  reproach  to  the  commercial  and  finan- 
cial community  for  indulging  in  what  has  been  termed 
an  "  inflation  of  credit."  The  truth,  however,  is  that 
the  greatest  part  of  the  present  burden  of  debt  was 
created  by  war.  The  four  great  wars  since  1860  (viz.: 
the  Italian,  the  Austro-Prussian,  the  American  and  the 
Franco-Prussian)  increased  the  national,  municipal  and 
State  debts  of  the  countries  involved  about  seven  thou- 
sand millions  of  dollars,  or  over  30  per  cent  of  the  total 


VALUES   OF   THE   PRECIOUS   METALS.  149 

of  present  funded  debts  in  the  world.     The  increase  of 
debt  as  the  result  of  wars  in  the  last  sixteen  years  has 
been  more  than  double  the  increase  of  debt  from  the 
expansion  of  the  railroad  system,  and  all  other  national 
and  municipal  improvements  and  enterprises  in  the  same 
time.     It  is  the  war  debts  —  not  the  debts  of  excessive 
enterprise  —  that  have  created  the  present  burden  of  an- 
nual interest.     It  is  war  debts  also  that  are  represented 
in  all  the  inconvertible  paper  money  now  afloat  in  the 
world.     Now,  it  is  not  to  be  presumed  that  the  "  reign 
of  peace"  has  begun,  or  that  it  will  begin  any  time  in 
the  next  hundred  years.     In  the  last  quarter  of  a  century 
great  wars  have  averaged  less  than  five  years  apart.     The 
wars  of  this  period,  also,  have  been  more  largely  finan- 
cial contests  than  ever  before  in  the  history  of  modern 
civilization.     It  is  a  trick  of  capital  in  all  countries  to 
persuade  the  people  that  their  honor  is  at  stake  in  the 
payment  of  all  these  war  debts  at  the  highest  valuation 
the  avarice  of  the  holders  may  set  on  them.     But  it  is 
plain  that  a  few  years  more  of  such  war  experience  as 
the  last  sixteen,  would  place  the  burden  of  annual  in- 
terest and  the  redemption  of  the  paper  money  beyond 
the  ability  of  the  people.     Indeed,  with  gold  as  the 
exclusive  standard  of  values,  it  is  extremely  problem- 
atic whether  "  specie  payments"  could  be  maintained 
even  in  all  the  countries  that  do  now  propose  to  pay 
interest  and  redeem  paper  money  in  gold.    The  countries 
that  propose  to  do  this  are  Great  Britain,  France,  Ger- 
many and  the  United  States.     The  aggregate  of  paper 
money  in  these  is  about  $1,700,000,000,  and  the  total 
amount  of  gold  does  not  exceed  $1,600,000,000.     As- 
suming that  an  average  reserve  of  50  per  cent  would 
sustain  the  present  volume  of  paper  money  —  by  con- 


150  HAND-BOOK   OF   FINANCE. 

stant  daily  redemptions  —  at  par  with  gold,  it  would  re- 
quire that  an  aggregate  of  $850,000,000  of  gold  should 
be  evenly  and  constantly  distributed  in  all  the  countries. 
But  with  so  small  a  stock,  outside  of  banks  and  national 
treasuries,  the  movements  of  foreign  trade  would  soon 
disturb  this  distribution  of  the  metal  and  cause  suspen- 
sion again,  in  one  country  or  another.* 

Even  if  we  state  the  problem  upon  a  broader  basis,  it 
is  equally  difficult  of  solution,  viz. : 

Europe  and  North  America  are  now  using  an  aggre- 
gate of  about  $7,300,000,000  of  gold,  silver  and  paper 
money  as  mediums  of  exchange.  Of  this  amount  over 
$3,100,000,000  is  paper  promises  to  pay  gold  or  silver. 
But  on  just  about  three  fourths  of  this  aggregate  of 
over  $3,100,000,000  of  paper  money,  specie  payments 


*  Early  in  the  current  year  (1876)  the  London  Economist,  referring  to  the  situ- 
ation of  the  Bank  of  France  as  compared  with  its  position  in  1860,  said  : 

And  here,  just  as  in  1860,  the  principal  component  in  the  reserve  is  the  com- 
paratively appreciated  metal.  The  metals  have,  indeed,  changed  places:  in  1860 
the  metal  which  had  augmented  in  value  was  silver;  now  the  metal  which  has 
increased  in  value  is  gold.  But  the  position  of  the  Bank  of  France  is,  for  the 
purpose  now  in  hand,  identical.  It  now  holds  an  enormous  amount  of  gold, 
which  it  would  be  dangerous  to  pay  away;  just  as  in  1860  it  held  a  much  smaller, 
though  still  considerable,  amount  of  silver,  to  pay  which  would  have  been 
equally  dangerous. 

Of  course,  as  long  as  the  Bank  of  France  suspends  specie  payments  it  does 
not  feel  this  difficulty.  If  we  may  be  permitted  to  say  so,  it  is  on  a  lower  level 
altogether.  It  is  not  perplexed  by  the  possibility  of  having  to  pay  in  the  appre- 
ciated metal,  for  it  does  not,  except  in  minor  sums,  and  when  it  chooses,  pay  in 
any  metal.  But  as  soon  as  the  Bank  of  France  performs  its  legal  obligations, 
the  problem  which  the  defective  currency  system  of  France  sets  before  it  must 
be  solved.  There  is,  indeed,  one  obvious  mode  of  solving  it.  There  is  some- 
thing very  singular  in  a  difficulty  which  is  caused  by  holding  a  commodity  which 
has  enhanced  in  value.  The  obvious  remedy  is  to  sell  it  in  the  market  and  to 
obtain  the  advantage  of  that  value.  If  the  Bank  of  France  could  sell  its  gold 
for  silver  at  the  present  price,  it  would  get  a  large  profit;  it  would  have  done  a 
capital  bullion  transaction  on  a  magnificent  scale,  and  the  shareholders  would 
be  large  gainers  in  consequence.  In"l860  the  Emperor  Napoleon,  to  whom  the 
accounts  of  the  Bank  of  France  were  then  constantly  submitted,  would  not  per- 
mit the  natural  remedy  to  be  tried,  and,  therefore,  the  Bank  of  France  had  to 
forego  the  profit,  and  to  change  away  the  dearer  metal  with  the  Bank  of  England. 
But.  now  there  can  be  no  choice;  the  sums  to  be  dealt  with  are  so  large  that  no 
such  palliative  by  exchange  can  be  thought  of.  If  cash  payments  are  to  be 
resumed  in  France,  large  sales  of  gold  for  silver  must  precede  and  accompany  it. 

And  the  effect  of  such  sales  will,  of  course,  be  to  raise  the  price  of  silver  as 
compared  with  gold.  The  circumstances  of  the  Bank  of  France  will  make  the 
possession  of  much  silver  constantly  essential  to  it,  and  the  effect  of  this  new 
large  demand  will  be  a  rise  of  price. 


VALUES   OF  THE   PEECIOUS   METALS.  151 

have  been  suspended  for  many  years.  Even  if  it  were 
possible  for  Kussia,  Austria,  Italy,  France  and  the  United 
States  to  acquire  the  coin  with  which  to  resume  specie 
payments  on  their  respective  amounts  of  paper  currency, 
the  amount  of  coin  that  would  be  drawn  into  national 
treasuries  for  that  purpose  would  cause  a  contraction  of 
over  20  per  cent  in  the  aggregate  volume  of  circulating 
medium  in  the  hands  of  the  people  of  Europe  and 
North  America.  It  is  beyond  reasonable  doubt  that 
such  a  change  would  cause  a  proportionate  enhancement 
of  the  vast  volume  of  war  debts,  which  would  be  shown 
in  the  corresponding  decline  in  the  prices  of  commodi- 
ties. It  would  require  that  the  peace  of  Europe  and 
America  should  remain  undisturbed  for  at  least  ten  or 
fifteen  years  before  the  industry  of  the  people  could 
produce  wealth  enough  to  pay  off  this  increase  in  the 
burden  of  debt  and  so  adjust  the  values  of  commodities 
and  the  value  of  money  to  the  new  basis.  The  im- 
probability of  such  a  peace  is  the  measure  of  the 
improbability  of  the  resumption  of  specie  payments  in 
all  the  countries  where  they  are  now  suspended. 


152 


HAND-BOOK   OP   FINANCE. 


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PUBLIC    DEBT    OF    THE    U.    S. 


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154 


HAND-BOOK    OF    FINANCE. 


The  following  statement  of  the  outstanding  principal 
of  the  public  debt  on  the  1st  of  January  each  year,  from 
1791  to  1876  inclusive,  is  taken  from  the  annual  report 
of  the  Secretary  of  the  Treasury  (B.  H.  Bristow)  for  the 
fiscal  year  ending  June  30,  1875,  the  amount  for  June 
30,  1876,  being  added  from  the  official  monthly  debt 
statement : 


Year.  Amount. 

1791 $75,463,476 

1792 77,227,924 

1793 80,352,634 

1794 78,427,404 

1795 80,747,587 

1796 83.762,172 

1797 82,064,479 

1798 79,228,529 

1799 78,408.669 

1800 82.976,294 

1801 83,038,050 

1802 80,712,632 

1803 77,054.686 

1804 86,427,120 

1805 82,312,150 

1806 75,723,270 

1807 69,218,398 

1808 65,196,317 

1809 57,023,192 

1810 53,173.217 

1811 48.005,587 

1812 45,209,737 

1813 55:962,827 

1814 81,487,846 

1815 99,833,660 

1816 127.334,933 

1817 123^491,965 

1818 103;466,633 

1819 95,529,648 

1820 91,015,566 

1821 89,987,427 

1822 93,546.676 

1823 90,875,877 

1824 90,269,777 

1825 83,788,432 

1826 81,054,059 

1827 73,987,357 


Year.  Amount. 

1828 $67,475,043 

1829 58,421,413 

1830 48,565,406 

1831 39,123,191 

1832 24,322,235 

1833 7,001,698 

1834 4,760,082 

1835 37,513 

1836 336,957 

1837 3,308,124 

1838 10,434,221 

1839 3,573,343 

1840 5,250,875 

1841 13,594.480 

1842 20,601,226 

1843 32,742,922 

1844 23,461,652 

1845 15,925,303 

1846 15.550,202 

1847 38.826.534 

1S48 47,044,862 

1849 63,061.858 

1850 63,452.773 

1851 68,304,796 

1852 66.199,341 

1853 59:803,117 

1854 42,242,222 

1855 35.586.956 

1856 31,972,537 

1857 28.699.831 

1858 44,911.881 

1859 58,496.837 

1860 64,842,287 

1861 90,580.873 

1862 524,176,412 

1863 1,119,772,138 

1864 1,815,784,370 


87 
67 
50 
68 
18 
88 
03 
05 
83 
07 
14 
82 
54 
73 
28 
00 
50 
01 
97 
77 
23 
69 
55 
02 
71 
70 
42 
56 
90 
85 
03 


PUBLIC    DEBT   OF    THE    U.    S. 


155 


Year.  Amount. 

1865 2,G80,G47,869  74 

186G 2,773,236,173  69 

1867 2,678,126,103  87 

1868 2,611,687,851  19 

1869 2,588,452,213  94 

1870 2,480,672,427  81 


Year.  Amount. 

1871 2,353,211,332  32 

1872 2,253,251,328  78 

1873 * 2,234,482,993  20 

1874 *  2,251,690,468  43 

1875 *  2,232.284,531  95 

1876,  June  30.  .*  2,180,325,037  00 


The  total  debt,  including  all  outstanding  obligations 
of  the  government,  reached  its  maximum  in  1866,  when 
it  aggregated  §2,773,236,173.  But  the  total  interest- 
bearing  portion  of  the  debt  aggregated  at  the  same  time 
only  $2,339,954,150. 

The  reduction  in  the  total  annual  interest  since  the 
aggregate  of  interest-bearing  and  non-interest-bearing 
debt  reached  its  maximum  has  been  as  follows,  viz.: 


1867,  June  30. 

1868,  "  . 

1869,  "  . 

1870,  "  , 

1871,  "  . 

1872,  "  . 

1873,  "  . 

1874,  "  . 

1875,  "  . 

1876,  "  . 


Principal. 


$2,678, 
2,611, 
2,588, 
2.481, 
2,353, 
2.253, 
2,234. 
2,251, 
2,232 
2,178 


126,603 
687,851 
452,213 
672,427 
411,032 
251,328 
482,993 
690,468 
284,531 
700,111 


Interest. 


$143,781,592 

140,404,045 

130,694,242 

129,235,498 

125,576,565 

117,357,839 

104,750,628 

98,799,144 

98,002,161 

95,104,269 


*  In  the  amount,  here  stated  as  the  outstanding  principal  of  the  public  debt 
are  included  the  certificates  of  deposit  outstanding  on  the  30th  of  June,  issued 
under  act  of  June  8,  1872,  amounting  to  $31,730,000  in  1873,  $58,700,000  in  1874, 
and  $58,415,000  in  1875,  for  which  a  like  amount  in  United  States  notes  was  on 
special  deposit  in  the  treasury  for  their  redemption,  and  added  to  the  cash 
balance  in  the  treasury.  These  certificates,  as  a  matter  of  accounts,  are  treated 
as  a  part  of  the  public  debt,  but  being  offset  by  notes  held  on  deposit  for  their 
redemption,  should  properly  be  deducted  from  the  principal  of  the  public 
debt  in  making  comparison  with  former  years. 


FOREIGN  INDEBTEDNESS  OF  THE  UNITED  STATES. 


IN  1874  Dr.  Edward  Young,  Chief  of  the  National 
Bureau  of  Statistics,  made  an  estimate  of  the  amount 
of  American  national,  state  and  corporate  bonds  held  in 
Europe  at  the  close  of  1873,  aDd  arrived  at  the  conclu- 
sion that  the  amount  then  was,  in  round  figures,  twelve 
hundred  million  dollars.  By  a  memorandum  sent  to 
the  writer  of  this  in  August  of  this  year  (1876),  Dr. 
Young  estimated  the  amount  of  the  foreign  indebted- 
ness of  the  United  States  at  81,350,000,000. 

Dr.  Young's  method  of  arriving  at  the  estimate  of 
$1,200,000,000  of  foreign  indebtedness  at  the  close  of 
1873  is  somewhat  elaborate,  and  open  to  some  criticism, 
though  it  is  perhaps  as  logical  a  method  as  any  that  can 
be  devised  for  approximating  to  the  actual  amount,  the 
most  pertinent  objection  to  his  conclusions  being  that  he 
has  perhaps  estimated  the  average  prices  at  which  Ameri- 
can securities  have  sold  in  Europe  higher  than  was  actu- 
ally obtained  for  them.*     It  is  a  tolerably  well-estab- 

*  Balance  op  Trade.— It  is  necessary,  in  the  outset,  to  consider  the  elements 
that  enter  into  this  computation.  In  the  first  place,  we  must  ascertain  the  ad- 
verse balance  of  trade  upon  the  actual  specie  values  of  imports  and  exports.  As 
in  the  fiscal  year  1862  the  value  of  exports  exceeded  that  of  the  imports,  the 
period  embraced  in  this  investigation  begins  on  the  1st  July,  1862. 

(Here  follows  a  table  of  the  total  imports  and  exports  of  merchandise  and 
specie  from  July  1,  1862,  to  December  31,  1873,  which  has  been  incorporated  in  a 
table  of  the  same  items  on  page  159,  for  the  longer  period  from  June  30,  1843,  to 
June  30,  1876.  The  period  selected  by  Dr.  Young  shows  an  excess,  of  merchan- 
dise imports  over  merchandise  exports,  exclusive  of  specie,  amounting  to  $1,040.- 
535,721.     This  adverse  balance  was  reduced  by  the  export  of  $681,946,067  of 


FOREIGN    INDEBTEDNESS    OF   THE    U.    S.  157 

lislied  fact  that  while  a  great  many  American  state, 
municipal  and  corporate  bonds  negotiated  in  London 
since  1865  have  sold  for  about  par,  a  great  many  more 
have  sold  for  much  less,  and  it  is  well  known  that  of  the 
vast  amount  of  railroad  bonds  negotiated  there  since 
1870  more  than  half  of  the  aggregate  amount  did  not 
net  the  corporations  in  the  United  States  over  80  cents 
on  the  dollar  after  deducting  all  expenses.  The  amounts 
"called  up"  each  month  on  subscriptions  to  foreign 
loans  in  London,  as  published  in  the  Investors'  Manual, 
show  that  even  since  the  crisis  of  1873  the  amount  of 
American  state,  municipal,  railroad  and  other  corporate 
bonds  in  London  has  averaged  at  least  §75,000,000  per 

specie  in  excess  of  the  imports  of  specie  to  $358,589,654.  Beginning  with  this 
net  adverse  balance  of  $35S,589,654  for  the  eleven  and  a  half  years,  he  proceeds 
to  take  into  the  account  the  following  elements  that  increase  it,  viz.:) 

Smuggling  and  Undervaluation.— From  a  careful  examination  of  the 
subject  during  the  past  four  years,  the  undersigned  considers  an  addition  of  3 
per  cent  to  the  total  value  of  the  imports  for  undervaluation  and  smuggling  as 
an  ample  allowance.  It  must  be  borne  in  mind  that  neither  bulky  nor  free 
goods  are  smuggled,  and  that  merchandise  paying  specific  duties  will  not  be 
undervalued.  What  kind  of  goods  will  probably  be  smuggled?  Precious  stones, 
jewelry,  watches,  silks,  fine  laces,  etc.  An  examination  of  the  official  returns  of 
the  port  of  New  York,  published  by  this  Bureau,  will  show  that  the  total  value 
of  free  and  dutiable  merchandise  which  entered  into  consumption  during  the 
fiscal  year  ended  June  30,  1873,  was,  in  round  numbers,  $438,000,000,  3  per  cent 
on  which  is  $13,140,000.  The  following  were  the  imports  of  goods  most  easily 
smuggled: 

Precious  stones $2,678,368 

Jewelry  and  all  manufactures  of  gold  and  silver 1.030.510 

Watches  and  watch  movements  and  materials 3,039,512 

Silk  dress  goods 16.353,380 

Total $23,101,770 

which,  with  fine  laces  and  embroideries,  probably  reached  $26,000,000.  The 
$13,000,000  above  estimated  is  equal  to  50  per  cent  of  the  value  of  such  of  these 
articles  as  paid  duty.  Is  it  believed  that  the  undervaluations  and  smuggling  of 
such  articles  as  the  above  named  amount  to  $13,000,000  annually?  Perhaps,  of 
precious  stones,  jewelry,  watches,  laces  and  embroideries  it  may  reach  $5,000,000, 
but  cannot  amount  to  $8,000,000  on  silk  goods.  It  seems  evident,  therefore,  that 
an  addition  of  3  per  cent  to  the  value  of  imported  merchandise  is  sufficient  to 


158  HAND-BOOK   OF   FINANCE. 

annum;  and  if  we  set  the  aggregate  of  such  bonds 
(exclusive  of  national  bonds)  negotiated  in  Europe  since 
1870  at  $800,000,000  par  value,  it  will  probably  be 
below  the  actual  amount,  and  if  the  average  net  pro- 
ceeds of  these  received  by  the  American  corporations  be 
estimated  at  say  85  cents  on  the  dollar,  it  would  show 
$120,000,000  of  debt  created  without  any  return.  But 
assuming  that  Dr.  Young's  estimate  of  $1,200,000,000 
at  the  close  of  1873  was  nearly  correct,  it  would  place 
the  aggregate  at  the  present  time  somewhere  about 
$1,400,000,000.  But  if  his  estimate  of  80  cents  on  the 
dollar  for  all  bonds  sold  prior  to  1874  be  10  per  cent  too 
high,  as  is  thought  by  some,  it  would  still  make  the 

cover  the  evasions  of  the  revenue,  such  addition  amounting  in  the  period  under 
review  to  $146,801,754. 

Freights.— The  values  of  the  imports  of  merchandise,  as  presented  in  the 
first  table,  being  those  at  the  ports  of  shipment,  it  will  be  proper  to  add  thereto 
the  amount  of  freights  to  the  several  ports  of  the  United  States.  As  a  part  is 
brought  in  American  vessels,  and  as  the  freight  so  earned  is  an  addition  to  the 
wealth  of  the  country,  it  is  only  necessary  to  consider,  as  another  element  in 
the  computation,  the  amount  of  freight  received  by  foreign  ship-owners.  As 
inward  freights  on  goods  vary  from  100  per  cent  on  the  value  of  salt  and  some 
other  bulky  articles  to  2  or  3  per  cent  on  dress  goods,  and  less  than  one-half  per 
cent  on  specie,  it  is  difficult  to  estimate  the  average  ad  valorem  rate.  On  mer- 
chandise the  average  is  not  much  less  than  8  per  cent;  but,  as  nearly  all  the 
specie  and  the  greater  part  of  the  dress  goods,  jewelry,  watches,  etc.,  are  brought 
by  foreign  steamships,  which  disburse  a  considerable  amount  for  fuel  and  ship- 
stores,  it  is  believed  that  6  per  cent  on  the  total  value  of  imports  is  an  estimate 
of  approximate  accuracy.  As  the  imports  in  foreign  vessels  amounted  to 
$3,531,374,280,  the  element  of  foreign  freight  will,  therefore,  cause  an  increment 
of  §211,882,456. 

The  exports  of  domestic  products,  as  given  in  the  trade  reports,  are  the 
currency  values  at  the  several  ports  of  shipment  in  the  United  States.  To 
make  these  conform  to  a  uniform  standard,  the  values  have  been  reduced  to 
gold  in  the  tables  above  presented.  The  total  amount  exported  in  American 
vessels  during  the  period  under  consideration  was  of  the  value  of  §1,450.000,000 
in  gold,  the  freight  on  which,  estimated  at  6  per  cent,  amounted  to  $87,000,000. 
which  sum  must  be  deducted  from  the  aggregate  of  freights  carried  by  foreign 
vessels. 

The  last  item  to  be  added  to  the  estimate  is  the  interest  which  has  become 
due  upon  the  debt  while  it  has  been  accruing.  To  obtain  this  with  approximate 
accuracy  is  the  most  difficult  part  of  this  investigation.    The  most  careful 


FOREIGN"   TRADE   OF   THE   U.   S. 


159 


aggregate  at  present  (August,  1876)  about  $1,500,000,- 
000.  Of  this  amount  about  one  half  is  presumed  to  be 
government  bonds. 


FOREIGN   TRADE  OF  THE    UNITED    STATES  FOR   24 
YEARS. 

Total  imports  into  the  United  States  each  year  from 
1843  to  1876  inclusive,  as  stated  by  the  National  Bureau 
of  Statistics  for  each  year  ending  June  30  : 


Year. 

Merchandise. 

Specie. 

Total  Imports. 

1843 

$42,433,464 
102,604,606 
113,184,322 
117,914,065 
122,424,349 
148,638,644 
141,206,199 
173,509,526 
210,771,429 

$22,320,335 
5,830,429 
4,070,242 
3,777,732 
24,121,289 
6.360,284 
6,651,240 
4,628,792 
5,453,503 

$64,753,799 
108,435,035 
117,254,564 

1844 

1845  

1846 

121,691,797 
146  545  638 

1847 

1848 

154,998',928 

1849 

147,857  439 

1850 

178,138,318 
216,224,932 

1851 

analysis  which  has  been  made,  as  a  basis  for  an  intelligent  estimate,  leads  to 
the  conclusion  that  the  amount  of  interest  is  not  less  than  $277,000,000  nor 
more  than  $290,000,000.  Lest  the  undersigned  should  be  charged  with  a  desire 
to  reduce  the  aggregate  of  our  foreign  debt  below  the  actual  amount,  the  larger 
sum  will  be  used  in  the  computation. 

We  have  now  the  following  items: 

Adverse  balance  of  trade  for  eleven  and  a  half  years $358,589,654 

Allowance  for  merchandise  smuggled  and  undervalued 146,861,754 

Freights  on  imports  to  foreign  shipowners 211,882,456 

Interest 290,000,000 

$1,007,333,864 
Less  freights  on  exports  to  United  States  shipowners 87,000.000 

Aggregate $920,333,864 

From  the  above  statement  it  appears  that  the  debt  we  owe  to  Europe,  in- 
curred since  July  1, 1863,  amounts  to  $920,000,000.  But  owing  to  the  fact  that 
during  the  former  part  of  that  period  our  credit  abroad  was  not  assured,  our 
securities  sold  considerably  below  par.  Owing  to  the  wide  range  in  price  — 
from  40  cents  on  the  dollar  at  one  time,  to  par  at  a  more  recent  period— there 


160 


HAND-BOOK    OF   FINANCE. 


Year. 

Merchandise. 

1852 

$207,440,398 
263,777,265 
297,623,039 
257,808,708 
310,432,310 
348,428,342 
263,338.654 
331,333,341 
353.616.119 
289,310,542 
189,356,677 
243,335.815 
316,447,283 
238.745,580 
434,812,066 
395,763.100 
357.436,440 
417,506,379 
435,958.408 
520,223,684 
626,595,077 
642,136,210 
567.406,342 
535,005,336 
460,713,761 

1853 

1854 

1855 

1856 

1857 

1858 

1859 

1860 

1861 

1862 

1863 

1864 

1865 

1866 

1867 

1868 

1869 

1870 

1871 

1872 

1873 

1874 

1875 

1876 

Specie. 


$5,505,044 

4,201,382 

6,939,342 

3,659,812 

4,207.632 

12,46l!799 

19,27<  496 

7,434,789 

8,550,135 

46,339,611 

16,415,052 

9,584,105 

13,115,612 

9,810,072 

10,700,092 

22,070,475 

14,188.368 

19.807,876 

26,419,179 

21,270,024 

13,743,689 

21,480.937 

28,454,906 

18,900,717 

15,935,453 


Total  Imports. 

$212,945,442 

267,978,647 
304,562,381 
261,468.520 
314,639,942 
360,890,141 
282,613,150 
338,768,130 
362,166.254 
335,650,153 
205,771.729 
252,919.920 
329.562,895 
248,555,652 
445.512,158 
417,833.575 
371,624,808 
437,314,255 
462.377,587 
541,493,708 
640,338,766 
663,617,147 
595.861,248 
553,906,153 
476,649,214 


is  great  difficulty  in  ascertaining  the  average  rate  of  discount.  But  a  careful 
estimate  establishes  the  fact  that  the  average  discount  for  the  whole  period 
(eleven  and  a  half  years)  under  consideration  was  less  than  SO  per  cent.  In  com- 
puting the  aggregate  of  this  debt,  the  par  value  of  these  securities  must  be 
ascertained,  and  as  they  sold  at  an  average  rate  of  at  least  80  cents  on  the 
dollar,  it  follows  that  our  debt  to  foreign  nations,  incurred  in  the  past  dozen 
years,  amounts  to  about  $1,150,000,000.  Although  there  were  no  national 
securities  held  abroad  at  the  commencement  of  our  late  war,  yet  some  of  the 
bonds  of  the  Commonwealth  of  Pennsylvania,  and  probably  of  Massachusetts 
and  other  States,  as  well  as  railroad  shares  and  securities,  were  owned  in 
Europe.  In  the  absence  of  accurate  data  on  the  subject,  it  is  believed  that  fifty 
millions  is  an  ample  estimate  for  these  ante  bellum  securities.  With  this  addi- 
tion, our  aggregate  foreign  debt  amounts  to  nearly  twelve  hundred  million 

DOLLARS ! 

[It  will  be  borne  in  mind  that  the  foregoing  is  an  unofficial  estimate  of  the 
amount  of  the  United  States  securities  — national,  state,  municipal  and  corpora- 
tion —  held  in  foreign  countries.  The  figures  in  the  tables  have,  however,  been 
taken  from  the  records  of  the  bureau,  and  are,  therefore,  trustworthy.] 

Edward  Young. 
—Monthly  Report  of  the  Bureau  of  Statistics  for  February,  187 h. 


FOREIGN   TRADE    OF   THE    U.    S.  161 

TOTAL   EXPORTS   (SPECIE   VALUES). 


Year. 

Merchandise. 

1843 

1844 

- 

1845 

1846 

1847. 

1848 

1849 

1850 

1851 

1852 

1853 

1854 

1855 

1856 

1857 

1858 

1859 

I860 

1861 

1862 

1863 

$203,964,447 
158,837,t>88 
166,029,303 
348,859,522 
292,361,225 
281,952,899 
286,117,697 
392,771,768 
442,820,178 
444,177,586 
522,479,922 
646,856,926 
579,367,543 
540,338,693 

1864 

1865  . 

1866 

1867 

1868 

1869 

1870 

1871 

1872 

1873 

1874 

1875 

1876 

Specie  and 
Bullion. 


I  64,156,611 
105,396,541 
67,643,226 
86,044,071 
60,868,372 
93,784,105 
57,138,380 
58,155,666 
98,441,988 
79,877,534 
84,608,574 
59,699,686 
73,857,129 
56,506,302 


Total  Exports. 


$  84,346,474 
111,200,046 
114,646,606 
113,488,516 
158,648,622 
154,032,131 
145,755,820 
151,898,720 
218,388,011 
209,658,366 
230,976,157 
273,898,000 
275,156,846 
326,964,908 
362,960,682 
324,644.421 
356,789,462 
400,122,292 
249,344,913 
227,558,141 
268,121,058 
264,234,529 
233,672,529 
434,903,593 
353,229,597 
375,737,004 
343,256,077 
450,927,434 
541,262,166 
524,055,120 
607,088,496 
706,556,612 
653,224,672 
596,844,995 


162 


HAND-BOOK   OF   FINANCE. 


The  following  figures  show  the  debtor  balances  against 
and  the  creditor  balances  in  favor  of  the  United  States 
each  year  for  twenty-four  years : 


Debtor  Balance. 

Creditor  Balance. 

1843 
1844 
1845 
1846 
1847 
1848 
1849 
1850 
1851 
1852 
1853 
1854 
1855 
1856 
1857 
1858 
1859 
1860 
1861 
1862 
1863 
1864 
1865 
1866 
1867 
1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875 
1876 

$19,590,675 

2,765,011 

$2  607  958        

8  203  281  

12,102,984 

966  797      

2  101  619   

26  239  598   

2,163,079 

3  287  076  

37  002  490  

30  664  381  

13,688,326 

12,324,966 

2,070,541 

42,031.271 

18,021.332 

37,955,938 

21,786,412 

15,201,138 

65  328  366    

14  883  123  

10  608  565  

64  603  978  

4,112,196 

94  058  178  

11450  153  

231  542  

116,283,646  

56  528  651   

108,695.364 

99,318,519 

120,195.781 

REVENUE    AND    EXPENDITURES    OF   THE    U.    S.        163 


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MONETARY  LAWS 


UNITED    STATES. 


Revision  of  all  Laws  in  1873;    Coinage  Laws;   Laws  Authorizing 

United  States  Notes  and  Bonds;  Laws  for  National 

Banks  and  Bank  Currency. 


EEFEKEJNTCE  TABLES 


Tables  of  Prices  for  54  years;    Tables  of  Values  of  Coins  and 

Monetary  Units  of  all  Nations;    Table  of  the  Average 

Annual  Price  of  Gold  from  1862  to  1876;  Table 

of  the  Value  of  United  States  Notes 

with  Gold  at  any  Price. 


REVISION  OF  ALL  THE  PERMANENT  LAWS  OF  THE 
UNITED  STATES  IN  1873. 


BY  an  act  of  Congress,  June  27,  1866,  the  President 
was  authorized  to  appoint  three  commissioners, 
"  three  persons  learned  in  the  law,"  "  to  revise,  simplify, 
arrange  and  consolidate  all  statutes  of  the  United  States, 
general  and  permanent  in  their  nature."  This  act  was 
"  revived  "  by  the  act  of  May  4,  1870,  under  authority 
of  which  the  President  appointed  the  three  commis- 
sioners. 

This  commission  prosecuted  its  important  work  by 
striking  out  all  that  was  obsolete  and  all  that  had  been 
repealed  down  to  December  1,  1873,  and  then  brought 
the  parts  of  the  various  laws  relating  to  the  same  sub- 
jects together  under  their  respective  new  titles.  This 
work  was  presented  to  the  forty-second  Congress,  and 
adopted  by  act  of  June  20,  1874,  which  repealed  all 
general  laws  in  existence  prior  to  December  1,  1873,  as 
follows,  viz.: 

(Sec.  5596  )  All  acts  of  Congress  passed  prior  to  said  1st  day  of 
December,  1873,  any  portion  of  which  is  embraced  in  any  section 
of  said  revision,  are  hereby  repealed,  and  the  section  applicable 
thereto  shall  be  in  force  in  lieu  thereof;  all  parts  of  such  acts  not 
contained  in  such  revision  having  been  repealed  or  suspended  by 
subsequent  acts,  or  not  being  general  or  permanent  in  their  nature; 
provided,  that  the  incorporation  into  said  revision  of  any  general 
and  permanent  provision,  taken  from  an  act  making  appropriations, 
or  from  an  act  containing  other  provisions  of  a  private,  local,  or 


168  HAND-BOOK   OF   FINANCE. 

temporary  character,  shall  not  repeal  or  in  any  way  affect  any  appro- 
priation, or  any  provision  of  a  private,  local,  or  temporary  character, 
contained  in  any  of  said  acts,  but  the  same  shall  remain  in  force; 
and  all  acts  of  Congress  passed  prior  to  said  last  named  day,  no 
part  of  which  are  embraced  in  said  revision,  shall  not  be  atfected 
or  changed  by  its  enactment. 

The  repeal  above  referred  to,  it  will  be  seen,  related 
back  to  December  1,  1873.  But  in  the  interim  to  the 
date  of  adoption  many  important  amendments  had  been 
made  to  the  laws  that  were  revised.  Thus  the  "  Na- 
tional Currency  Act,"  or  "National  Bank  Act,"  was 
amended  by  act  of  June  20, 1874,  abolishing  the  reserve 
to  be  held  against  circulation.  This  amendment  was 
itself  partly  repealed  by  the  specie  resumption  act  of 
January  14,  1875.  None  of  this  legislation  appears  in 
the  Eevised  Statutes,  and  these  changes  only  appear  in 
the  Statutes  at  Large  in  the  form  of  amendments  to  a 
law  that  does  not  exist  in  its  original  form  and  arrange- 
ment of  sections. 

Unlike  the  laws  in  regard  to  the  coinage  and  in 
regard  to  the  issue  and  redemption  of  United  States 
notes  and  bonds,  there  are  no  questions  of  general 
importance  in  connection  with  the  history  of  the  legis- 
lation in  regard  to  the  national  banks  and  to  national 
bank  currency. 


THE  PLAN  OF  COMPILATION 

pursued  in  the  following  pages  has,  therefore,  been  to 
divide  the  monetary  laws  under  three  heads,  viz.:  Coin- 
age, United  States  Notes  and  Bonds,  and  National 
Banks  and  Bank  Currency, —  each  of  these  three  divi- 
sions being  compiled  with  a  different  view.     Under  the 


REVISION    OF   LAWS    OF   THE    U.   S.  169 

head  of  Coinage  are  given  only  such  clauses  of  the  laws 
as  relate  to  the  weight,  fineness  and  legal  tender  value 
of  United  States  and  foreign  coins.  Under  the  head  of 
United  States  Notes  and  Bonds  are  given  only  such 
clauses  as  relate  to  the  character  of  the  obligation  on 
the  part  of  the  government  as  a  borrower,  and  the  kind 
of  payment  provided  for  in  the  redemption  of  such 
obligations ;  all  minor  points  not  having  any  important 
bearing  on  these  are  omitted.  But  under  the  head  of 
National  Banks  and  Bank  Currency  are  given  all  the 
laws  now  in  force  regarding  the  organization  and  man- 
agement of  National  Banks  and  the  issue  and  redemp- 
tion of  National  Bank  Currency.  The  object,  therefore, 
in  the  compilation  of  laws  under  the  last  mentioned 
head  has  been  to  embody  in  their  proper  places  in  the 
Revised  Statutes  all  the  amendments  passed  in  the 
interim  between  December  1,  1873,  and  June  20,  1874, 
and  to  strike  out  all  that  was  repealed  in  the  same  time, 
thus  making  the  compilation  of  laws  under  the  head  of 
National  Banks  and  Bank  Currency  the  same  as  if  the 
revision  of  laws  had  been  continued  to  June  20,  1874, 
instead  of  terminating  at  December  1, 1873. 


COINAGE. 


THE  following  includes  all  the  clauses  of  all  the  laws 
of  the  United  States  (and  the  previous  Confedera- 
tion of  States)  from  1781  to  1876,  as  they  relate  to  the 
Weight,  Fineness  and  Legal-Tender  Value  of  United 
States  and  Foreign  Coins.  This  summary  is  intended 
as  historic  of  the  policy  of  the  government  in  regard  to 
gold  and  silver  coins  and  the  relative  values  of  the  two 
metals : 

Articles  of  Confederation  between  the  States,  adopted  March  1,  1781. 

§  1.'  The  United  States  m  Congress  assembled  shall  also  have 
the  sole  and  exclusive  right  and  power  of  regulating  the  alloy  and 
value  of  coin  struck  by  their  own  authority  or  by  that  of  the  respect- 
ive States,  fixing  the  standard  of  weights  and  measures  throughout 
the  United  States. 

[By  act  of  the  Congress  of  the  Confederation  passed  August  8, 
1786,  and  by  the  ordinance  of  October  16,  1786,  a  silver  dollar,  con- 
taining 375.64  grains  of  pure  silver,  was  established  as  the  "  unit  of 
account,11  though  the  Confederation  had  not  established  any  mint 
and  no  such  coins  as  were  specified  by  the  act  were  coined  anywhere. 
The  dollar  thus  established  was  intended  to  be  the  equivalent  of 
4s.  6d.  sterling,  but  fell  short  of  it  by  about  two  per  cent.] 

The  Constitution,  adopted  September  17,  1787. 

The  Congress  shall  have  power  — 

§  2.   To  borrow  money  on  the  credit  of  the  United  States. 

§  3.  To  coin  money,  regulate  the  value  thereof,  and  of  foreign 
coin,  and  fix  the  standard  of  weights  and  measures. 

No  State  shall  coin  money;  emit  bills  of  credit;  make  anything 
but  gold  and  silver  coin  a  tender  in  payment  of  debts;  pass  any  ex 
post  facto  law,  or  law  impairing  the  obligation  of  contracts. 


COINAGE.  171 


ACTS  OF  CONGRESS. 

Act  April  2,  1792. 

That  the  money  of  account  of  the  United  States  shall  be  expressed 
in  dollars  or  units,  dimes  or  tenths,  cents  or  hundredths,  and  mills 
or  thousandths,  a  dime  being  the  tenth  part  of  a  dollar,  a  cent  the 
hundredth  part  of  a  dollar,  a  mill  the  thousandth  part  of  a  dollar, 
and  that  all  accounts  in  the  public  offices  and  all  proceedings  in  the 
courts  of  the  United  States  shall  be  kept  and  had  in  conformity  to 
this  regulation. 

§  4.  That  a  mint  for  the  purpose  of  a  national  coinage  be  and  the 
same  is  established;  to  be  situate  and  carried  on  at  the  seat  of  gov- 
ernment of  the  United  States  for  the  time  being. 

§  5.  There  shall  be,  from  time  to  time,  struck  and  coined  at  the 
said  mint,  coins  of  gold,  silver  and  copper,  of  the  following  denomi- 
nations, values  and  descriptions,  viz. :  Eagles  —  each  to  be  of  the 
value  of  ten  dollars  or  units,  and  to  contain  247f  grains  of  pure  or  270 
grains  of  standard  gold.  Half  eagles  —  each  to  be  of  the  value  of  five 
dollars  or  units,  and  to  contain  123|  grains  of  pure  or  135  grains  of 
standard  gold.  Quarter  eagles  —  each  to  be  of  the  value  of  two  dol- 
lars and  a  half  dollar,  and  to  contain  61 J  grains  of  pure  or  67£  grains 
of  standard  gold.  Dollars  or  units  —  each  to  be  of  the  value  of  a 
Spanish  milled  dollar,  as  the  same  is  now  current,  and  to  contain 
371-T6  grains  of  pure  or  416  grains  of  standard  silver.  Half  dol- 
lars—  each  to  be  of  half  the  value  of  the  dollar  or  unit,  and  to  con- 
tain 185if  grains  of  pure  or  208  grains  of  standard  silver.  Quarter 
dollars  —  each  to  be  of  one  fourth  the  value  of  the  dollar  or  unit, 
and  to  contain  92||  grains  of  pure  or  104  grains  of  standard  silver. 
Dismes  —  each  to  be  of  one  tenth  the  value  of  a  dollar  or  unit,  and 
to  contain  37T2g  grains  of  pure  or  41f  grains  of  standard  silver.  Half 
dismes  —  each  to  be  of  the  value  of  one  twentieth  of  a  dollar,  and 
to  contain  18T9e-  grains  of  pure  or  20f  grains  of  standard  silver. 
Cents  —  each  to  be  of  the  value  of  one  hundredth  part  of  a  dollar, 
and  to  contain  11  pennyweights  of  copper.  Half  cents  —  each  to 
be  of  the  value  of  half  a  cent,  and  to  contain  5£  pennyweights  of 
copper. 

§  6.  The  proportional  value  of  gold  to  silver  in  all  coins  which 
shall,  by  law,  be  current  as  money  within  the  United  States  shall  be 
as  fifteen  to  one,  according  to  quantity  in  weight  of  pure  gold  or  pure 
silver:  that  is  to  say,  every  fifteen  pounds  weight  of  pure  silver  shall 
be  of  equal  value  in  all  payments  with  one  pound  weight  of  pure 


172  HAND-BOOK    OF   FINANCE. 

gold,  and  so  in  proportion  as  to  greater  or  less  quantities  of  the 
respective  metals. 

Act  February  9,  1793. 

§7.  At  the  expiration  of  three  years  next  ensuing  from  the  time 
when  the  coinage  of  gold  and  silver,  agreeably  to  the  act  entitled 
"  An  act  establishing  a  mint  and  regulating  the  coins  of  the  United 
States,1'  shall  commence  at  the  mint  of  the  United  States  (which 
shall  be  announced  by  proclamation  of  the  President  of  the  United 
States),  all  foreign  gold  coins  and  all  foreign  silver  coins,  except 
Spanish  milled  dollars  and  parts  of  such  dollars,  shall  cease  to  be 
legal  tender  as  aforesaid.     (See  §  13.) 

§  8.  All  foreign  gold  and  silver  coins,  except  Spanish  milled  dol- 
lars and  parts  of  such  dollars,  which  shall  be  received  in  payment 
for  moneys  due  to  the  United  States  after  the  said  time  when  the 
coining  of  gold  and  silver  coins  shall  begin  at  the  mint  of  the  United 
States,  shall,  previously  to  their  being  issued  in  circulation,  be  coined 
anew,  in  conformity  to  the  act  entitled  ' '  An  act  establishing  a  mint 
and  regulating  the  coins  of  the  United  States."     (See  §  19.) 

Act  March  2,  1799. 

§  9.  All  foreign  coins  and  currencies  shall  be  estimated  at  the 
following  rates,  viz. :  each  pound  sterling  of  Great  Britain  at  four 
dollars  and  forty-four  cents  ($4.44);  each  livre  tournois  of  France  at 
aighteeii  and  a  half  cents  (18^);  each  florin  or  guilder  of  the  Union 
Netherlands  at  forty  cents  (£0);  each  mark-banco  of  Hamburg  at 
thirty-three  and  one-third  cents  (33%);  each  rix  dollar  of  Denmark 
at  one  hundred  (100)  cents;  each  real  of  plate  and  each  rial  of  vellon 
of  Spain,  the  former  at  ten  cents  and  the  latter  at  five  cents  each; 
each  milree  of  Portugal  at  one  dollar  and  twenty-four  cents;  each 
pound  sterling  of  Ireland  at  four  dollars  and  ten  cents;  each  tale  of 
China  at  one  dollar  and  forty-eight  cents;  each  pagoda  of  India  at 
one  dollar  and  ninety-four  cents;  each  rupee  of  Bengal  at  fifty- five 
and  one -half  cents;  and  all  other  denominations  of  money,  as  nearly 
as  may  be  to  the  said  rates  or  the  intrinsic  value  thereof,  compared 
with  money  of  the  United  States. 

§  10.  All  duties  and  fees  to  be  collected  shall  be  payable  in 
money  of  the  United  States,  or  in  foreign  gold  and  silver  coins  at 
the  following  rates,  that  is  to  say:  the  gold  coins  of  Great  Britain 
and  Portugal  of  the  standard  prior  to  the  year  1792  at  the  rate  of 
one  hundred  cents  for  every  twenty- seven  grains  of  the  actual  weight 


COINAGE.  173 

thereof;  the  gold  coins  of  France,  Spain  and  the  dominions  of  Spain, 
of  the  standard  prior  to  the  year  1792,  at  the  rate  of  one  hundred 
cents  for  every  twenty- seven  grains  and  two-fifths  of  a  grain  of  the 
actual  weight  thereof;  Spanish  milled  dollars  at  the  rate  of  one  hun- 
dred cents  for  each  dollar,  the  actual  weight  whereof  shall  not  be 
less  than  seventeen  (17)  pennyweights  and  seven  (7)  grams  —  and  in 
proportion  for  the  parts  of  a  dollar;  crowns  of  France  at  the  rate  of 
one  hundred  and  ten  cents  for  each  crown,  the  actual  weight  whereof 
shall  not  be  less  than  eighteen  (18)  pennyweights  and  seventeen  (17) 
grains,  and  in  proportion  for  the  parts  of  a  crown.  Provided,  that 
no  foreign  coins  shall  be  receivable  which  are  not  by  law  a  legal 
tender  for  the  payment  of  all  debts  —  except  in  consequence  of  a 
proclamation  of  the  President  of  the  United  States  authorizing  such 
foreign  coins  to  be  received  in  payment  of  duties  and  fees  as  afore- 
said. 

Act  March  3,  1801. 

§11.  The  foreign  coins  and  currencies  hereinafter  mentioned 
shall  be  estimated  in  the  computation  of  duties  at  the  following 
rates :  each  sicca  rupee  of  Bengal  and  each  rupee  of  Bombay  at  fifty 
cents,  and  each  star  pagoda  of  Madras  at  one  hundred  and  eighty- 
four  cents. 

Act  April  10,  1806. 

§  12.  Foreign  gold  and  silver  coins  shall  pass  current  as  money 
within  the  United  States,  and  be  a  legal  tender  for  the  payment  of 
all  debts  and  demands  at  the  several  and  respective  rates  following, 
and  not  otherwise,  viz. :  The  gold  coins  of  Great  Britain  and  Portu- 
gal of  their  present  standard  at  the  rate  of  one  hundred  cents  for 
every  twenty-seven  grains  of  the  standard  weight  thereof;  the  gold 
coins  of  France,  Spain  and  the  dominions  of  Spain,  of  their  present 
standard,  at  the  rate  of  one  hundred  cents  for  every  twenty-seven 
grains  and  two-fifths  of  a  grain  of  the  actual  weight  thereof.  Spanish 
milled  dollars  at  the  rate  of  one  hundred  cents  for  each,  the  actual 
weight  whereof  shall  not  be  less  than  seventeen  (17)  pennyweights 
and  seven  (7)  grains,  and  in  proportion  for  the  parts  of  a  dollar. 
Crowns  of  France  at  the  rate  of  one  hundred  and  ten  cents  for  each 
crown,  the  actual  weight  whereof  shall  not  be  less  than  eighteen  (18) 
pennyweights  and  seventeen  (17)  grains,  and  in  proportion  for  the 
parts  of  a  crown.  And  it  shall  be  the  duty  of  the  Secretaiy  of  the 
Treasury  to  cause  assays  of  the  foreign  gold  and  silver  coins  of  the 


174  HAND-BOOK    OF    FINANCE. 

description  made  current  by  this  act,  and  which  shall  issue  subse- 
quently to  the  passage  of  this  act,  and  shall  circulate  in  the  United 
States — at  the  mint  aforesaid,  at  least  once  in  every  year,  and  to  make 
report  of  the  result  thereof  to  Congress,  for  the  purpose  of  enabling 
Congress  to  make  such  coins  current — if  they  shall  deem  the  same 
to  be  proper — at  then-  real  standard  value. 

§  13.  That  the  first  section  of  the  act  entitled  "An  act  regulating 
foreign  coins  and  for  other  purposes,"  passed  the  9th  day  of  Febru- 
ary, 1793,  be  and  the  same  is  hereby  repealed,  and  the  operation  of 
the  second  section  of  the  same  act  is  hereby  suspended  for  and  during 
the  space  of  three  years  from  the  passage  of  this  act.    (See  §  7-8.) 

Act  March  3,  1823. 

§  14.  The  following  gold  coins  shall  be  received  in  all  payments 
on  account  of  public  lands  at  the  several  and  respective  rates  follow- 
ing and  not  otherwise,  viz. :  the  gold  coins  of  Great  Britain  and 
Portugal  of  their  present  standard,  at  the  rate  of  one  hundred  cents 
for  every  twenty- seven  grains,  or  eighty- eight  cents  and  eight-ninths 
(88f)  per  pennyweight;  the  gold  coins  of  France,  of  then  present 
standard,  at  the  rate  of  one  hundred  cents  for  every  twenty-seven 
and  one-half  grams  or  eighty-seven  and  a  quarter  (87^)  cents  per 
pennyweight,  and  the  gold  coins  of  Spain,  of  their  present  standard, 
at  the  rate  of  one  hundred  cents  for  every  twenty- eight  and  a  half 
grains,  or  eighty-four  cents  per  pennyweight. 

§  15.  It  shall  be  the  duty  of  the  secretary  of  the  treasury  to 
cause  assays  of  the  foregoing  coins  to  be  made  at  the  mint  of  the 
United  States  at  least  once  in  every  year,  and  make  report  of  the 
result  thereof  to  Congress. 

Act  June  25,  1834. 

§  1G.  The  following  silver  coins  shall  be  of  the  legal  value,  and 
shall  pass  current  as  money  within  the  United  States,  by  tale  for  the 
payment  of  all  debts  and  demands  at  the  rate  of  one  hundred  cents 
the  dollar,  that  is  to  say,  the  dollars  of  Mexico,  Peru,  Chili  and 
Central  America,  of  not  less  weight  than  four  hundred  and  fifteen 
grains  each,  and  those  re-stamped  in  Brazil  of  the  like  weight,  of 
not  less  fineness  than  ten  ounces  fifteen  pennyweights  of  pure  silver 
in  the  troy  pound  of  twelve  ounces  of  standard  silver;  and  the  five- 
franc  pieces  of  France,  when  of  not  less  fineness  than  ten  (10)  ounces 
and  sixteen  (16)  pennyweights   in  twelve  ounces  troy  weight  of 


COINAGE.  175 

standard  silver,  and  weighing  not  less  than  three  hundred  and 
eighty-four  grains  eaeh  —  at  the  rate  of  ninety-three  (93)  cents  each. 
§  17.  The  following  gold  coins  shall  pass  current  as  money  in  the 
United  States,  and  be  receivable  in  all  payments  by  weight  for  the 
payment  of  all  debts  and  demands  at  the  rates  following,  that  is  to 
say:  the  gold  coins  of  Great  Britain,  Portugal  and  Brazil,  of  not  less 
than  twenty-two  (22)  carats  fine,  at  the  rate  of  ninety-four  cents  and 
eight-tenths  of  a  cent  (94^)  per  pennyweight;  the  gold  coins  of 
France,  nine-tenths  fine,  at  the  rate  of  ninety-three  cents  and  one- 
tenth  of  a  cent  (93^)  per  pennyweight,  and  the  gold  coins  of  Spain, 
Mexico  and  Columbia,  of  the  fineness  of  twenty  (20)  carats,  three 
grains  and  seven-sixteenths  (3T7g)  of  a  grain,  at  the  rate  of  eighty- 
nine  cents  and  nine-tenths  of  a  cent  (89T9¥)  per  pennyweight. 

Act  January  18,  1837. 

§  18.  The  standard  for  both  gold  and  silver  coins  of  the  United 
States  shall  hereafter  be  such  that  of  one  thousand  parts  by  weight 
nine  hundred  shall  be  of  pure  metal  and  one  hundred  of  alloy,  and 
the  alloy  of  silver  coins  shall  be  of  copper,  and  the  alloy  of  the  gold 
coins  shall  be  of  copper  and  silver,  provided  that  the  silver  do  not 
exceed  one-half  the  alloy. 

§  19.  Of  the  silver  coins,  the  Dollar  shall  be  of  the  weight  of 
412%  grains;  the  Half  Dollar  of  the  weight  of  206)4  grains;  the 
Quarter  Dollar  of  the  weight  of  103%  grains;  the  Dime,  or  tenth 
part  of  a  dollar,  of  the  weight  of  41)^  grains,  and  the  Half  Dime, 
or  twentieth  part  of  a  dollar,  of  the  weight  of  20%  grains. 

§  20.  And  that  Dollars,  Half  Dollars,  Quarter  Dollars,  Dimes  and 
Half  Dimes  shall  be  legal  tenders  of  payment  according  to  their 
nominal  value  for  any  sums  whatever. 

§  21.  Of  the  gold  coins,  the  weight  of  the  Eagle  shall  be  258 
grains;  that  of  the  Half  Eagle  129  grains,  and  of  the  Quarter  Eagle 
64%  grains. 

§  22.  And  that  for  all  sums  whatever  the  Eagle  shall  be  a  legal 
tender  of  payment  for  ten  dollars,  the  Half  Eagle  for  five  dollars, 
and  the  Quarter  Eagle  for  two  and  a  half  dollars. 

Act  July  27,  1842. 

§  23.  In  all  payments  by  or  to  the  treasury,  whether  made  here 
or  in  foreign  countries  where  it  becomes  necessary  to  compute  the 
value  of  the  pound  sterling,  it  shall  be  deemed  equal  to  four  dollars 
and  eighty-four  cents  ($4.84). 


176  HAND-BOOK   OF   FINANCE. 

Act  March  3,  1843. 

§  24.  The  following  gold  coins  shall  pass  current  as  money  in  the 
United  States  and  be  receivable  by  weight  for  the  payment  of  all 
debts  and  demands  at  the  rates  following,  that  is  to  say :  the  gold 
coins  of  Great  Britain ,  of  not  less  than  nine  hundred  and  fifteen  and 
a  half  thousandths  (915^-1,000)  in  fineness,  at  ninety-four  cents  and 
six-tenths  (94^)  of  a  cent  per  pennyweight,  and  the  gold  coins  of 
France,  of  not  less  than  eight  hundred  and  ninety-nine  thousandths 
(tVA)  m  fineness,  at  ninety-two  cents  and  nine-tenths  of  a  cent 
(92T9jy)  per  pennyweight. 

The  following  foreign  silver  coins  shall  pass  current  as  money 
within  the  United  States  and  be  receivable  by  tale  for  the  payment 
of  all  debts  and  demands  at  the  rates  following,  that  is  to  say:  the 
Spanish  pillar  dollars,  and  the  dollars  of  Mexico,  Peru  and  Bolivia, 
of  not  less  than  eight  hundred  and  ninety- seven  thousandths  (x$ro) 
in  fineness  and  four  hundred  and  fifteen  (415)  grains  in  weight,  at 
one  hundred  cents  each,  and  the  five-franc  pieces  of  France,  of  not 
less  than  nine  hundred  thousandths  (x9(j°o°o)  m  fineness  and  three 
hundred  and  eighty-four  (384)  grains  in  weight,  at  ninety-three 
(93)  cents  each. 

Act  March  3,  1849. 

§  25.  There  shall  be  from  time  to  time  struck  and  coined  at  the 
mint  of  the  United  States  and  the  branches  thereof — conformably  in 
all  respects  to  law,  and  conformably  in  all  respects  to  the  standard  for 
gold  coins  now  established  by  law  —  coins  of  gold  of  the  following 
denominations  and  value,  viz. :  Double  Eagles,  each  to  be  of  the 
value  of  twenty  dollars  or  units,  and  Gold  Dollars,  each  to  be  of  the 
value  of  one  dollar,  or  unit. 

§  26.  For  all  sums  whatever  the  Double  Eagle  shall  be  a  legal 
tender  for  twenty  dollars,  and  the  Gold  Dollar  shall  be  a  legal 
tender  for  one  dollar. 

§  27.  In  adjusting  the  weights  of  gold  coins  henceforward  the 
following  deviations  from  the  standard  weight  shall  not  be  exceeded 
in  any  of  the  single  pieces,  namely:  in  the  double  eagles,  the  eagle 
and  the  half  eagle,  one  half  of  a  grain;  and  in  the  quarter  eagle 
and  gold  dollar,  one  quarter  of  a  grain;  and  that  in  weighing  a 
large  number  of  pieces  together,  when  delivered  from  the  chief 
coiner  to  the  treasurer,  and  from  the  treasurer  to  the  depositors,  the 
deviation  from  the  standard  weight  shall  not  exceed  three  penny- 
weights in  one  thousand  double  eagles;  two  pennyweights  in  one 


COINAGE.  177 

thousand  eagles;  one  and  one-half  pennyweights  in  one  thousand 
half  eagles;  one  pennyweight  in  one  thousand  quarter  eagles,  and 
one-half  of  a  pennyweight  in  one  thousand  gold  dollars. 

Act  March  3,  1851. 

§28.  It  shall  be  lawful  to  coin  at  the  mint  of  the  United  States 
and  its  branches  a  piece  of  the  denomination  and  legal  value  of 
three  cents,  or  three-hundredths  of  a  dollar,  to  be  composed  of  three- 
fourths  silver  and  one-fourth  copper,  and  to  weigh  twelve  (12)  grains 
and  three-eighths  (%)  of  a  grain;  that  it  shall  be  a  legal  tender  in 
payment  of  debts  for  all  sums  of  thirty  cents  and  under. 

Act  February  21,  1853. 

§  29.  That  the  weight  of  the  Half  Dollar,  or  piece  of  fifty  cents, 
shall  be  one  hundred  and  ninety- two  (192)  grains;  and  the  Quarter 
Dollar,  Dime  and  Half  Dime  shall  be  respectively  one-half,  one-fifth 
and  one-tenth  of  the  weight  of  the  Half  Dollar. 

§  30.  The  silver  coins  issued  in  conformity  with  the  above  section 
shall  be  legal  tenders  in  payment  of  debts  for  all  sums  not  exceeding 
five  dollars. 

§  31.  From  time  to  time  there  shall  be  struck  and  coined  at  the 
mint  of  the  United  States  and  the  branches  thereof,  conformably  in 
all  respects  to  the  standard  of  gold  coins  now  established  by  law,  a 
coin  of  gold  of  the  value  of  Three  Dollars  or  Units. 

§  32.  And  that  hereafter  the  Three  Cent  piece  now  authorized  by 
law  shall  be  made  of  the  weight  of  three-fiftieths  of  the  weight  of 
the  half  dollar,  as  provided  in  said  act,  and  of  the  same  standard  of 
fineness.  And  said  act,  entitled  "An  act  amendatory  of  existing 
laws  relative  to  the  Half  Dollar,  Quarter  Dollar,  Dime  and  Half 
Dime,'''  shall  take  effect  and  be  in  full  force  from  and  after  the  first 
day  of  April,  1853,  anything  to  the  contraiy  notwithstanding. 

Act  February  21,  1851. 

§  33.  The  standard  weight  of  the  Cent  coined  at  the  mint  shall 
be  seventy-two  (72)  grains,  or  three-twentieths  of  an  ounce  troy, 
with  no  greater  deviation  than  four  grains  in  each  piece;  and  said 
Cent  shall  be  composed  of  eighty-eight  (88)  per  centum  of  copper 
and  twelve  (12)  per  centum  of  nickel.  And  the  coinage  of  the  Half 
Cent  shall  cease. 


178  HAND-BOOK    OF    FINANCE. 

Act  February  21,  1857. 

§  34.  The  pieces  commonly  known  as  the  quarter,  eighth  and 
sixteenth  of  the  Spanish  pillar  dollar  and  of  the  Mexican  dollar 
shall  be  receivable  at  the  Treasury  of  the  United  States  and  its  sev- 
eral offices,  and  at  the  several  post  offices  and  land  offices,  at  the 
rates  of  valuation  following,  viz. :  the  fourth  of  a  dollar,  or  piece  of 
two  reals,  at  twenty  cents;  the  eighth  of  a  dollar,  or  piece  of  one 
real,  at  ten  cents;  and  the  sixteenth  of  a  dollar,  or  half  real,  at  five 
cents. 

§  35.  All  former  acts  authorizing  the  currency  of  foreign  gold  or 
silver  coins,  and  declaring  the  same  a  legal  tender  in  payment  of 
debts,  are  hereby  repealed;  but  it  shall  be  the  duty  of  the  director 
of  the  mint  to  cause  assays  to  be  made  from  time  to  time  of  such  for- 
eign coins  as  may  be  known  to  commerce,  to  determine  their  average 
weight,  fineness  and  value,  and  to  embrace  in  his  annual  report  a 
statement  of  the  results  thereof. 

Act  April  22,  1864. 

§'36.  The  standard  weight  of  the  cent  coined  at  the  mint  of  the 
United  States  shall  be  forty-eight  grains,  or  one  tenth  of  one  ounce 
troy,  and  said  cent  shall  be  composed  of  ninety-five  per  centum  of 
copper  and  five  per  centum  of  tin  and  zinc  in  such  proportions  as 
shall  be  determined  by  the  director  of  the  mint;  and  there  shall  be 
from  time  to  time  struck  and  coined  at  the  mint  a  two-cent  piece  of 
the  same  composition,  the  standard  weight  of  winch  shall  be  ninety- 
six  grains,  or  one  fifth  of  an  ounce  troy,  with  no  greater  deviation 
than  four  grains  to  each  piece. 

§  37.  The  said  coins  shall  be  a  legal  tender  in  any  payment,  the 
one  cent  coin  to  the  amount  of  ten  cents,  and  the  two  cent  coin  to 
the  amount  of  twenty  cents;  and  it  shall  be  lawful  to  pay  out  said 
coins  in  exchange  for  the  lawful  currency  of  the  United  States 
(except  cents  or  half  cents  issued  under  former  acts  of  Congress)  in 
suitable  sums,  by  the  treasurer  of  the  mint,  and  by  such  other 
depositaries  as  the  secretary  of  the  treasury  may  designate. 

Act  March  3,  1865. 

§  38.  There  shall  be  coined  at  the  mint  of  the  United  States  a 
three  cent  piece  composed  of  copper  and  nickel  in  such  proportion — 
not  exceeding  twenty-five  (25)  per  centum  of  nickel  —  as  shall  be 
determined  by  the  director  of  the  mint,  the  standard  weight  of  which 


COINAGE.  179 

shall  be  thirty  grains,  with  no  greater  deviation  than  four  grains  to 
each  piece. 

§  39.  The  said  coin  shall  be  a  legal  tender  in  any  payment  to  the 
amount  of  sixty  cents;  and  it  shall  be  lawful  to  pay  out  said  coins  in 
exchange  for  the  lawful  currency  of  the  United  States  (except  cents 
or  half  cents  or  two  cent  pieces  issued  under  former  acts  of  Congress) 
in  suitable  sums,  by  the  treasurer  of  the  mint,  and  by  such  other 
depositaries  as  the  secretary  of  the  treasury  may  designate.  Pro' 
vided,  that  from  and  after  the  passage  of  this  act  no  issues  of  frac- 
tional notes  of  the  United  States  shall  be  of  less  denomination  than 
five  cents. 

§  40.  The  one  and  two  cent  coins  of  the  United  States  shall  not 
be  a  legal  tender  for  any  payment  exceeding  four  cents  in  amount, 
(previous  laws  to  the  contrary  repealed). 

Act  May  16,  1866. 

§  41.  There  shall  be  coined  at  the  mint  of  the  United  States  a 
five  cent  piece,  composed  of  copper  and  nickel  in  such  proportion  — 
not  exceeding  twenty-five  per  centum  of  nickel  —  as  shall  be  deter- 
mined by  the  director  of  the  mint,  the  standard  weight  of  which 
shall  be  seventy-seven  and  sixteen  hundredths  grains,  with  no  greater 
deviation  than  two  grains  to  each  piece. 

§  42.  Said  coins  shall  be  a  legal  tender  in  any  payment  to  the 
amount  of  one  dollar;  and  it  shall  be  lawful  to  pay  out  said  coins  for 
lawful  currency  of  the  United  States,  in  suitable  sums,  by  the  treas- 
urer of  the  mint,  and  by  such  other  depositaries  as  the  secretary  of 
the  treasury  may  designate. 

§  43.  That  from  and  after  the  passage  of  this  act  no  issues  of 
fractional  notes  of  the  United  States  shall  be  of  less  denommation 
than  ten  cents. 

§  44.  It  shall  be  lawful  for  the  treasurer  and  the  several  assistant 
treasurers  of  the  United  States  to  redeem  in  national  currency,  under 
such  rules  and  regulations  as  may  be  prescribed  by  the  secretary  of 
the  treasury,  the  coins  herein  authorized  to  be  issued  when  presented 
in  sums  of  not  less  than  one  hundred  dollars. 

/  Act  March  3,  1871. 

§  45.  That  the  secretary  of  the  treasury  is  required  to  redeem  in 
lawful  money  all  copper,  bronze,  copper-nickel  and  base-metal  coin- 
age of  eveiy  kind  hitherto  authorized  by  law,  when  presented  in 
sums  of  not  less  than  twenty  dollars. 

V 


180  HAI^D-BOOK    OF    FINANCE. 

Act  February  12,  1813. 

§  46.  That  the  gold  coins  of  the  United  States  shall  be  a  One 
Dollar  Piece,  which,  at  the  standard  weight  of  twenty-five  and 
eight-tenths  (25^)  grains,  shall  be  the  Unit  of  Value;  a  Quarter 
Eagle,  or  two  and  a  half  dollar  piece;  a  Three  Dollar  Piece;  a 
Half  Eagle,  or  five  dollar  piece;  an  Eagle,  or  ten  dollar  piece;  and 
a  Double  Eagle,  or  twenty  dollar  piece.  And  the  standard  weight 
of  the  Gold  Dollar  shall  be  twenty-five  and  eight-tenths  grains;  of 
the  Quarter  Eagle  sixty-four  and  one-half  grains;  of  the  Three  Dol- 
lar Piece  seventy-seven  and  four- tenths  grains;  of  the  Half  Eagle 
one  hundred  and  twenty-nine  grains;  of  the  Eagle  two  hundred  and 
fifty-eight  grains;  of  the  Double  Eagle  five  hundred  and  sixteen 
grains,  which  coins  shall  be  a  legal  tender  in  all  payments  at  their 
nominal  value  when  not  below  the  standard  weight  and  limit  of  tol- 
erance provided  in  this  act,  and  that  when  reduced  in  weight  below 
said  standard  and  tolerance  shall  be  a  legal  tender  in  proportion  to 
their  actual  weight. 

Any  gold  coins  of  the  United  States,  if  reduced  by  natural  abra- 
sion not  more  than  a  half  of  one  per  cent  below  the  standard  weight 
after  twenty  years'  circulation,  and  at  a  ratable  proportion  for  any 
less  period,  shall  be  received  at  their  nominal  value  at  the  United 
States  treasury. 

§  47.  The  silver  coins  of  the  United  States  shall  be  a  Trade  Dol- 
lar, a  Half  Dollar,  a  Quarter  Dollar,  a  Dime.  And  the  weight  of 
the  Trade  Dollar  shall  be  four  hundred  and  twenty  (420)  grains  troy; 
the  weight  of  the  Half  Dollar  shall  be  twelve  grams  and  one  half  of 
a  gram ;  the  Quarter  Dollar  and  the  Dime  shall  be  respectively  one 
half  and  one  fifth  the  weight  of  said  half  dollar;  and  said  coins  shall 
be  a  legal  tender  at  their  nominal  value  for  any  amount  not  exceed- 
ing five  dollars  in  one  payment. 

§  48.  The  standard  for  both  gold  and  silver  coins  of  the  United 
States  shall  be  such  that  of  one  thousand  parts  by  weight  nine  hun- 
dred shall  be  of  pure  metal  and  one  hundred  of  alloy.  The  alloy  of 
the  silver  coins  shall  be  of  copper.  The  alloy  of  the  gold  coins  shall 
be  of  copper  or  of  copper  and  silver,  but  the  silver  shall  in  no  case 
exceed  one  tenth  of  the  whole  alloy. 

§  49.  The  minor  coins  of  the  United  States  shall  be  a  Five  Cent 
Piece,  a  Three  Cent  Piece  and  a  One  Cent  Piece.  The  alloy  for  the 
five  and  three  cent  pieces  shall  be  of  copper  and  nickel,  to  be  com- 
posed of  three-fourths  copper  and  one-fourth  nickel.  The  alloy  of 
the  one  cent  piece  shall  be  ninety-five  per  centum  of  copper  and  five 


COINAGE.  181 

per  centum  of  tin  and  zinc,  in  such  proportions  as  shall  be  determined 
by  the  director  of  the  mint.  The  weight  of  the  five  cent  piece  shall  be 
seventy-seven  and  sixteen-hundredths  grains  troy;  of  the  three  cent 
piece  thirty  grains,  and  of  the  one  cent  piece  forty-eight  grains. 

§  50.  No  coins,  either  of  gold,  silver  or  minor  coinage,  shall  here- 
after be  issued  from  the  mint  other  than  those  of  the  denominations, 
standards  and  weights  set  forth  in  this  title. 

§  51.  Silver  coins,  other  than  the  trade  dollars,  shall  be  paid  out  at 
the  several  mints  and  at  the  assay  office  in  New  York  city  in  ex- 
change for  gold  coins  at  par,  in  sums  not  less  than  one  hundred  dol- 
lars. 

§  52.  Nothing  herein  contained  shall,  however,  prevent  the  pay- 
ment of  silver  coins  at  their  nominal  value  for  silver  parted  from 
gold,  as  provided  in  this  title,  or  for  change  less  than  one  dollar  in 
settlement  of  gold  deposits. 

§  53.  In  adjusting  the  weights  of  the  gold  coins  the  following 
deviations  shall  not  be  exceeded  in  any  single  piece :  In  the  double 
eagle  and  the  eagle,  one  half  of  a  grain;  in  the  half  eagle,  the  three 
dollar  piece,  the  quarter  eagle  and  the  one  dollar  piece,  one  fourth 
of  a  grain,  and  in  weighing  a  number  of  pieces  together,  when  de- 
livered by  the  coiner  to  the  superintendent  and  by  the  superintend- 
ent to  the  depositor,  the  deviation  from  the  standard  weight  shall 
not  exceed  one  hundredth  of  an  ounce  in  five  thousand  dollars  in 
double  eagles,  eagles,  half  eagles  or  quarter  eagles,  or  in  one  thou- 
sand dollars  in  three  dollar  pieces  or  one  dollar  pieces. 

§  54.  In  adjusting  the  weight  of  the  silver  coins  the  following  de- 
viations shall  not  be  exceeded  in  any  single  piece:  In  the  dollar, 
the  half  dollar,  the  quarter  dollar  and  in  the  dime,  one  and  one-half 
grains,  and  in  weighing  a  large  number  of  pieces  the  deviations 
shall  not  exceed  two  hundredths  of  an  ounce  in  one  thousand  dollars, 
half  dollars,  or  quarter  dollars,  and  one  hundredth  of  an  ounce  in 
one  thousand  dimes. 

§  55.  In  adjusting  the  weight  of  the  minor  coins  provided  by  this 
title,  there  shall  be  no  greater  deviation  allowed  than  three  grains 
for  the  five  cent  piece,  and  two  grains  for  the  three  and  one  cent 
pieces. 

§  56.  That  all  other  acts  and  parts  of  acts  pertaining  to  the  mints, 
assay  offices  and  coinage  of  the  United  States,  inconsistent  with  the 
provisions  of  this  act,  are  hereby  repealed:  Provided,  That  this  act 
shall  not  be  construed  to  affect  any  act  done,  light  accrued,  or  pen- 
alty incurred  under  former  acts,  but  every  such  right  is  hereby  saved. 


182  HAND-BOOK   OF   FINANCE. 

Act  March  3,  1873. 

§  57.  The  value  of  the  sovereign,  or  pound  sterling,  shall  be 
deemed  equal  to  four  dollars  eighty-six  cents  and  six  and  one-half 
mills;  and  all  contracts  made  after  the  first  day  of  January,  1874, 
based  on  an  assumed  par  of  exchange  with  Great  Britain,  of  fifty- four 
pence  to  the  dollar,  or  four  dollars  forty-four  cents  and  four-ninths 
cents  to  the  sovereign,  or  pound  sterling,  shall  be  null  and  void. 

Act  March  3,  1875. 

§  58.  That  there  shall  be  from  time  to  time  coined  at  the  mints 
of  the  United  States,  conformably  in  all  respects  to  the  coinage  act 
of  1873,  a  coin  of  silver  of  the  denomination  of  twenty  cents,  and  of 
the  weight  of  five  grams.  That  the  twenty  cent  piece  shall  be  a 
legal  tender  at  its  nominal  value  for  any  amount  not  exceeding  five 
dollars  in  any  one  payment.  That  in  adjusting  the  weight  of  the 
twenty  cent  piece,  the  deviation  from  the  standard  weight  shall  not 
exceed  one  and  one-half  grams. 

Act  July  13,  1876. 

§  59.  That  the  trade  dollar  shall  not  hereafter  be  a  legal  tender. 
(See  Subsidiary  Silver  Coin  Bill,  page  201.) 


UNITED  STATES  NOTES  AND  BONDS. 


IK  the  preparation  of  the  following  digest  of  the  laws 
of  the  United  States  relating  to  the  issue  and  redemp- 
tion of  United  States  notes  and  bonds,  it  was  not 
deemed  necessary  to  cite  any  legislation  prior  to  1861. 
The  amount  of  national  obligations  assumed  to  be  yet 
"outstanding"  that  were  authorized  by  acts  prior  to 
1861,  is  unimportant,  and  it  is  moreover  believed  that 
a  large  proportion  of  such  notes  and  bonds  has  been 
destroyed  and  lost.  As  far  as  the  public  have  any  real 
interest  in  the  laws  relating  to  the  national  debt,  it  is 
confined  exclusively  to  the  war  debt  created  since  1860 
and  to  the  Pacific  Railroad  debt  created  since  1862. 

None  of  the  laws,  except  a  few  of  the  most  impor- 
tant, such  as  the  "Sinking  Fund  Act,"  the  "Public 
Credit  Act,"  the  "  Specie  Resumption  Act "  and  a  few 
others,  are  given  in  full,  as  the  details  of  printing, 
issuing,  signing,  and  a  multitude  of  other  minor  provi- 
sions, are  not  deemed  pertinent  to  the  greater  questions 
of  the  contract  between  the  government  as  a  borrower 
and  the  note  and  bond  holders  as  creditors,  nor  to  the 
legal-tender  character  of  notes  intended  to  circulate  as 
money.  But  the  object  in  this  division  of  the  compila- 
tion of  laws  has  been  to  give  all  the  clauses  in  the  acts 
of  Congress  which  have  any  important  bearing  on  the 
character  and  redemption  of  the  obligations  of  the 
United  States  issued  since  1860. 


184  HAND-BOOK   OF   FINANCE. 

Act  June  22,  1860. 

[This  act  authorized  the  issue  of  $21,000,000  of  6  per  cent  bonds 
to  be  used  in  the  redemption  of  outstanding  treasury  notes.] 

Act  December  11,  1860. 

That  the  President  of  the  United  States  be  authorized  to  cause 
treasury  notes  to  be  issued  for  such  sums  as  the  exigencies  of  the 
public  service  may  require,  but  not  to  exceed  at  any  time  the  amount 
of  ten  millions  ($10,000,000).  That  such  notes  shall  be  redeemed 
after  the  expiration  of  one  year.  They  shall  bear  interest,  6  per 
cent  per  annum. 

Act  February  8,  1861. 

That  the  President  of  the  United  States  be  authorized  to  borrow, 
on  the  credit  of  the  United  States,  a  sum  not  exceeding  twenty-five 
millions  ($25,000,000).  That  stock  shall  be  issued  for  the  amount  so 
borrowed,  bearing  interest  not  exceeding  6  per  centum  per  annum, 
and  to  be  reimbursed  within  a  period  not  beyond  twenty  years  and 
not  less  than  ten  years. 

Act  March  2,  1861. 

That  the  President  of  the  United  States  be,  and  hereby  is, 
authorized,  at  any  time  within  twelve  months  from  the  passage  of 
this  act,  to  borrow,  on  the  credit  of  the  United  States,  a  sum  not 
exceeding  ten  millions  of  dollars:  Provided,  That  no  stipulation  or 
contract  shall  be  made  to  prevent  the  United  States  from  reim- 
bursing any  sum  borrowed  under  the  authority  of  this  act  at  any 
time  after  the  expiration  of  ten  years  from  the  1st  day  of  July  next, 
by  the  United  States  giving  three  months'  notice,  to  be  published 
in  some  newspaper  published  at  the  seat  of  government,  of  their 
readiness  to  do  so;  and  no  contract  shall  be  made  to  prevent  the 
redemption  of  the  same  at  any  time  after  the  expiration  of  twenty 
years  from  the  said  1st  day  of  July  next,  without  notice.  That  stock 
shall  be  issued  for  the  amount  so  borrowed,  bearing  interest  not 
exceeding  6  per  cent  per  annum. 

Act  July  11,  1861. 

That  the  Secretary  of  the  Treasury  be  authorized  to  borrow,  on  the 
credit  of  the  United  States,  within  twelve  months,  a  sum  not  exceed- 
ing $250,000,000,  for  which  he  is  authorized  to  issue  coupon  bonds 
or  registered  bonds  or  treasury  notes  in  such  proportion  as  he  may 


UNITED    STATES    NOTES    AX  I)    BONDS.  185 

deem  advisable.  The  bonds  to  bear  interest  not  exceeding  seven 
per  cent  per  annum,  payable  semi-annually,  irredeemable  for  twenty 
years,  and  after  that  at  the  pleasure  of  the  United  States,  and  the 
treasury  notes  to  be  of  denominations  not  less  than  $50,  payable 
three  years  after  date,  with  interest  at  the  rate  of  seven  and  three- 
tenths  per  cent  per  annum.  And  the  Secretary  may  also  issue,  in 
exchange  for  coin,  treasury  notes  of  a  less  denomination  than  $50, 
not  bearing  interest  but  payable  on  demand  at  the  assistant  treas- 
uries of  the  United  States  —  or  treasury  notes  bearing  interest  at  the 
rate  of  3.65  per  cent  per  annum,  payable  in  one  year  from  date  and 
exchangeable  at  any  time  for  treasury  notes  (7-30s)  for  $50  and 
upward. 

That  the  Secretary  is  authorized,  whenever  he  shall  deem  it 
expedient,  to  issue,  in  exchange  for  coin  or  in  payment  of  public 
dues,  treasury  notes  of  any  of  the  denominations  hereinbefore  speci- 
fied, bearing  interest  not  exceeding  six  per  cent  per  annum,  and 
payable  at  any  time  not  exceeding  twelve  months  from  date ;  that  the 
amount  of  notes  so  issued  shall  at  no  time  exceed  $20,000,000. 

Act  August  5,  1861. 

That  the  Secretary  of  the  Treasury  is  authorized  to  issue  bonds  of 
the  United  States,  bearing  interest  at  six  per  cent  per  annum,  and 
payable  at  the  pleasure  of  the  United  States  after  twenty  years  from 
date.  If  any  holder  of  treasury  notes  bearing  interest  at  the  rate  of 
seven  and  three-tenths  per  cent  per  annum  desire  to  exchange  the 
same  for  said  bonds,  the  Secretary  may,  at  any  time  before  the 
maturity  of  said  treasury  notes,  issue  to  said  holder,  in  payment 
thereof,  an  amount  of  said  bonds  equal  to  the  amount  due  on  said 
treasury  notes ;  nor  shall  the  whole  amount  of  such  bonds  exceed  the 
whole  amount  of  treasury  notes  bearing  seven  and  three -tenths  per 
cent  interest  issued  under  said  act  (of  July  17,  1861). 

Act  February  12,  1862. 

That  the  Secretary  of  the  Treasury,  in  addition  to  the  $50,000,000 
of  notes  payable  on  demand  of  denominations  not  less  than  five 
dollars,  authorized  by  the  acts  of  July  17  and  August  5,  1861,  is 
authorized  to  issue  like  notes  to  the  amount  of  $10,000,000  —  said 
notes  shall  be  deemed  part  of  the  loan  of  $250,000,000  authorized 
by  said  acts. 


186  HAND-BOOK    OF    FINANCE. 

Act  February  25,  1862. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized  to  issue, 
on  the  credit  of  the  United  States,  one  hundred  and  fifty  millions  of 
dollars  of  United  States  notes,  not  bearing  interest,  payable  to  bearer, 
at  the  Treasury  of  the  United  States,  and  of  such  denominations  as 
he  may  deem  expedient,  not  less  than  five  dollars  each :  Provided, 
however,  That  fifty  millions  of  said  notes  shall  be  in  lieu  of  the 
demand  treasury  notes  authorized  to  be  issued  by  the  act  of  July 
seventeen,  eighteen  hundred  and  sixty-one:  which  said  demand  notes 
shall  be  taken  up  as  rapidly  as  practicable,  and  the  notes  herein  pro- 
vided for  substituted  for  them:  And  provided  further,  That  the 
amount  of  the  two  kinds  of  notes  together  shall  at  no  time  exceed  the 
sum  of  one  hundred  and  fifty  millions  of  dollars,  and  such  notes 
herein  authorized  shall  be  receivable  in  payment  of  all  taxes,  internal 
duties,  excises,  debts  and  demands  of  every  kind  due  to  the  United 
States,  except  duties  on  imports,  and  of  all  claims  and  demands 
against  the  United  States  of  every  kind  whatsoever,  except  for 
interest  upon  bonds  and  notes,  which  shall  be  paid  in  coin,  and 
shall  also  be  lawful  money  and  a  legal  tender  in  payment  of  all 
debts,  public  and  private,  within  the  United  States,  except  duties  on 
imports  and  interest  as  aforesaid.  And  any  holders  of  said  United 
States  notes  depositing  any  sum  not  less  than  fifty  dollars,  or  some 
multiple  of  fifty  dollars,  with  the  Treasurer  of  the  United  States,  or 
either  of  the  assistant  treasurers,  shall  receive  in  exchange  therefor 
duplicate  certificates  of  deposit,  one  of  which  may  be  transmitted  to 
the  Secretary  of  the  Treasury,  who  shall  thereupon  issue  to  the  holder 
an  equal  amount  of  bonds  of  the  United  States,  coupon  or  registered, 
as  may  by  said  holder  be  desired,  bearing  interest  at  the  rate  of  six 
per  centum  per  annum,  payable  semi-annually,  and  redeemable  at 
the  pleasure  of  the  United  States  after  five  years,  and  payable  twenty 
years  from  the  date  thereof.  And  such  United  States  notes  shall  be 
received  the  same  as  coin,  at  their  par  value,  in  payment  for  any 
loans  that  may  be  hereafter  sold  or  negotiated  by  the  Secretary  of 
the  Treasury,  and  may  be  re-issued  from  time  to  time  as  the  exi- 
gencies of  the  public  interest  shall  require. 

That  to  enable  the  Secretary  to  fund  the  floating  debt  of  the 
United  States  he  be  authorized  to  issue,  on  the  credit  of  the  United 
States,  bonds  to  an  amount  not  exceeding  $500,000,000,  redeemable 
at  the  pleasure  of  the  United  States  after  five  years,  and  payable 
twenty  years  after  date,  bearing  interest  at  the  rate  of  six  per  cent 
per  annum. 


UNITED   STATES   NOTES   AND    BONDS.  187 

Sinking  Fund  Act,  February  25,  1862. 

That  all  duties  on  imported  goods  shall  be  paid  in  coin,  or  in 
notes  payable  on  demand,  heretofore  authorized  to  be  issued  and  by 
law  receivable  in  payment  of  public  dues,  and  the  coin  so  paid  shall 
be  set  apart  as  a  special  fund  and  shall  be  applied  as  follows : 

First,  To  the  payment  in  coin  of  the  interest  on  the  bonds  and 
notes  of  the  United  States. 

Second,  To  the  purchase  or  payment  of  one  per  centum  of  the 
entire  debt  of  the  United  States  to  be  made  within  each  fiscal  year 
after  the  first  day  of  July,  1862,  which  is  to  be  set  apart  as  a  sinking 
fund,  and  the  interest  of  which  shall  in  like  manner  be  applied  to 
the  purchase  or  payment  of  the  public  debt  as  the  Secretary  of  the 
Treasury  shall  from  time  to  time  direct. 

Third,  The  residue  thereof  to  be  paid  into  the  Treasury. 

Act  March  11,  1862. 

That  the  Secretary  may  purchase  coin  with  any  of  the  bonds  or 
notes  of  the  United  States  authorized  by  law,  at  such  rates  and  upon 
such  terms  as  he  may  deem  most  advantageous  to  the  public  interest. 

(By  Sec.  2  of  this  act,  the  demand  notes  authorized  by  the  acts  of 
July  17,  1861,  and  February  12,  1862,  are  declared  lawful  money  and 
a  legal  tender,  same  as  the  treasury  notes  issued  under  act  of  Feb- 
ruary 25,  1862.) 

Pacific  Railroad  Bonds,  Act  July  1,  1862. 

Sec.  5.  That  for  the  purposes  herein  mentioned  the  Secretary  of 
the  Treasury  shall,  upon  the  certificate  in  writing  of  said  commis- 
sioners of  the  completion  and  equipment  of  forty  consecutive  miles 
of  said  railroad  and  telegraph,  in  accordance  with  the  provisions  of 
this  act,  issue  to  said  company  bonds  of  the  United  States  of  one 
thousand  dollars  each,  payable  in  thirty  years  after  date,  bearing-  six 
per  centum  per  annum  interest  (said  interest  payable  semi-annually), 
which  interest  may  be  paid  in  United  States  treasury  notes  or  any 
other  money  or  currency  which  the  United  States  have  or  shall 
declare  lawful  money  and  a  legal  tender,  to  the  amount  of  sixteen 
of  said  bonds  per  mile  for  such  section  of  forty  miles ;  and  to  secure 
the  repayment  to  the  United  States,  as  hereinafter  provided,  of  the 
amount  of  said  bonds  so  issued  and  delivered  to  said  company, 
together  with  all  interest  therein  which  shall  have  been  paid  by  the 
United  States,  the  issue  of  said  bonds  and  delivery  to  the  company 
shall  ipso  facto  constitute  a  first  mortgage  on  the  whole  line  of  the 


188  HAND-BOOK   OF   FINANCE. 

railroad  and  telegraph,  together  with  the  rolling  stock,  fixtures  and 
property  of  every  kind  and  description,  and  in  consideration  of  which 
said  bonds  may  be  issued;  and  on  the  refusal  or  failure  of  said  com- 
pany to  redeem  said  bonds,  or  any  part  of  them,  when  required  so  ' 
to  do  by  the  Secretary  of  the  Treasury,  in  accordance  with  the  provi- 
sions of  this  act,  the  said  road,  with  all  the  rights,  functions,  immu- 
nities and  appurtenances  thereunto  belonging,  and  also  all  lands 
granted  to  the  said  company  by  the  United  States,  which,  at  the 
time  of  said  default,  shall  remain  in  the  ownership  of  said  company, 
may  be  taken  possession  of  by  the  Secretary  of  the  Treasury,  for  the 
use  and  benefit  of  the  United  States:  Provided,  this  section  shall 
not  apply  to  that  part  of  any  road  now  constructed. 

Sec.  6.  That  the  grants  aforesaid  are  made  upon  condition  that 
said  company  shall  pay  said  bonds  at  maturity,  and  shall  keep  said 
railroad  and  telegraph  line  in  repair  and  use,  and  shall  at  all  times 
transmit  dispatches  over  said  telegraph  line,  and  transport  mails, 
troops  and  munitions  of  war,  supplies  and  public  stores  upon 
said  railroad  for  the  government,  whenever  required  to  do  so  by 
any  department  thereof,  and  that  the  government  shall  at  all  times 
have  the  preference  in  the  use  of  the  same  for  all  the  purposes 
aforesaid  (at  fair  and  reasonable  rates  of  compensation,  not  to  exceed 
the  amounts  paid  by  private  parties  for  the  same  kind  of  service); 
and  all  compensation  for  services  rendered  for  the  government 
shall  be  applied  to  the  payment  of  said  bonds  and  interest  until 
the  whole  amount  is  fully  paid.  Said  company  may  also  pay  the 
United  States,  wholly  or  in  part,  in  the  same  or  other  bonds,  treasury 
notes,  or  other  evidences  of  debt  against  the  United  States,  to  be 
allowed  at  par;  and  after  said  road  is  completed,  until  said  bonds 
and  interest  are  paid,  at  least  five  per  centum  of  the  net  earnings  of 
said  road  shall  also  be  annually  applied  to  the  payment  thereof. 

Act  July  11,  1862. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized  to  issue, 
in  addition  to  the  amounts  heretofore  authorized,  on  the  credit  of 
the  United  States,  one  hundred  and  fifty  millions  of  dollars  of  United 
States  notes,  not  bearing  interest,  payable  to  bearer  at  the  Treasury 
of  the  United  States,  and  of  such  denominations  as  he  may  deem 
expedient:  Provided,  That  no  note  shall  be  issued  for  the  fractional 
part  of  a  dollar,  and  not  more  than  thirty-five  millions  shall  be  of 
lower  denominations  than  five  dollars ;  and  such  notes  shall  be  re- 
ceivable in  payment  of  all  loans  made  to  the  United  States,  and  of 


UNITED    STATES   NOTES    AND    BONDS.  189 

all  taxes,  internal  duties,  excises,  debts  and  demands  of  every  kind 
due  to  the  United  States,  except  duties  on  imports  and  interest,  and 
of  all  claims  and  demands  against  the  United  States,  except  for 
interest  upon  bonds,  notes,  and  certificates  of  debt  or  deposit;  and 
shall  also  be  lawful  money  and  a  legal  tender  in  payment  of  all 
debts,  public  and  private,  within  the  United  States,  except  duties  on 
imports  and  interest,  as  aforesaid.  And  any  holder  of  said  United 
States  notes  depositing  any  sum  not  less  than  fifty  dollars,  or  some 
multiple  of  fifty  dollars,  with  the  Treasurer  of  the  United  States,  or 
either  of  the  assistant  treasurers,  shall  receive  in  exchange  therefor 
duplicate  certificates  of  deposit,  one  of  which  may  be  transmitted  to 
the  Secretary  of  the  Treasury,  who  shall  thereupon  issue  to  the 
holder  an  equal  amount  of  bonds  of  the  United  States,  coupon  or 
registered,  as  may  by  said  holder  be  desired,  bearing  interest  at  the 
rate  of  six  per  centum  per  annum,  payable  semi-annually,  and  re- 
deemable at  the  pleasure  of  the  United  States  after  five  years,  and 
payable  twenty  years  from  the  date  thereof:  Provided,  however,  That 
any  notes  issued  under  this  act  may  be  paid  in  coin,  instead  of  being 
received  in  exchange  for  certificates  of  deposit  as  above  specified,  at 
the  direction  of  the  Secretary  of  the  Treasury.  And  the  Secretary  of 
the  Treasury  may  exchange  for  such  notes,  on  such  terms  as  he  shall 
think  most  beneficial  to  the  public  interest,  any  bonds  of  the  United 
States  bearing  six  per  centum  interest,  and  redeemable  after  five  and 
payable  in  twenty  years,  which  have  been  or  may  be  lawfully  issued 
imder  the  provisions  of  any  existing  act;  may  reissue  the  notes  so 
received  in  exchange;  may  receive  and  cancel  any  notes  heretofore 
lawfully  issued  under  any  act  of  Congress,  and  in  lieu  thereof  issue 
an  equal  amount  in  notes  such  as  are  authorized  by  this  act;  and 
may  purchase,  at  rates  not  exceeding  that  of  the  current  market,  and 
cost  of  purchase  not  exceeding  one-eighth  of  one  per  centum,  any 
bonds  or  certificates  of  debt  of  the  United  States  as  he  may  deem 
advisable. 

Joint  Resolution  January  11,  1863. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized,  if  re- 
quired by  the  exigencies  of  the  public  service,  to  issue  on  the  credit 
of  the  United  States  the  sum  of  one  hundred  millions  of  dollars  of 
United  States  notes  in  such  form  as  he  may  deem  expedient,  not 
bearing  interest,  payable  to  bearer  on  demand,  and  of  such  denomi- 
nations, not  less  than  one  dollar,  as  he  may  prescribe,  which  notes 
so  issued  shall  be  lawful  money  and  a  legal  tender,  like  the  similar 


190  HAND-BOOK   OF   FINANCE. 

notes  heretofore  authorized,  in  payment  of  all  debts,  public  and 
private,  within  the  United  States,  except  duties  on  imports  and 
interest  on  the  public  debt. 

Act  March  3,  1863. 

That  the  Secretary  of  the  Treasury  be,  and  is  hereby,  authorized 
to  borrow,  from  time  to  time,  on  the  credit  of  the  United  States,  a 
sum  not  exceeding  three  hundred  millions  of  dollars  for  the  current 
fiscal  year,  and  six  hundred  millions  for  the  next  fiscal  year,  and  to 
issue  therefor  coupon  or  registered  bonds,  payable  at  the  pleasure  of 
the  government  after  such  periods  as  may  be  fixed  by  the  Secretary, 
not  less  than  ten  nor  more  than  forty  years  from  date,  in  coin,  and 
of  such  denominations,  not  less  than  fifty  dollars,  as  he  may  deem 
expedient,  bearing  interest  at  a  rate  not  exceeding  six  per  centum 
per  annum,  payable  on  bonds  not  exceeding  one  hundred  dollars, 
annually,  and  on  all  other  bonds  semi-annually,  in  coin;  and  he  may, 
in  his  discretion,  dispose  of  such  bonds  at  any  time,  upon  such  terms 
as  he  may  deem  most  advisable,  for  lawful  money  of  the  United 
States,  or  for  any  of  the  certificates  of  indebtedness  or  deposit  that 
may  at  any  time  be  unpaid,  or  for  any  of  the  treasury  notes  hereto- 
fore issued  or  which  may  be  issued  under  the  provisions  of  this  act. 
And  all  the  bonds  and  treasury  notes  or  United  States  notes  issued 
under  the  provisions  of  this  act  shall  be  exempt  from  taxation  by  or 
under  state  or  municipal  authority:  Provided,  That  there  shall  be 
outstanding  of  bonds,  treasury  notes,  and  United  States  notes,  at 
any  time,  issued  under  the  provisions  of  this  act,  no  greater  amount 
altogether  than  the  sum  of  nine  hundred  millions  of  dollars. 

That  the  Secretary  of  the  Treasury  be,  and  he  is  hereby,  author- 
ized to  issue,  on  the  credit  of  the  United  States,  four  hundred  mill- 
ions of  dollars  in  treasury  notes,  payable  at  the  pleasure  of  the 
United  States,  or  at  such  time  or  times  not  exceeding  three  years 
from  date  as  may  be  found  most  beneficial  to  the  public  interests, 
and  bearing  interest  at  a  rate  not  exceeding  six  per  centum  per 
annum,  payable  at  periods  expressed  on  the  face  of  said  treasury 
notes;  and  the  interest  on  the  said  treasury  notes  and  on  certificates 
of  indebtedness  and  deposit  hereafter  issued,  shall  be  paid  in  lawful 
money.  The  treasury  notes  thus  issued  shall  be  of  such  denomina- 
tions as  the  Secretary  may  direct,  not  less  than  ten  dollars,  and  may 
be  disposed  of  on  the  best  terms  that  can  be  obtained,  or  may  be 
paid  to  any  creditor  of  the  United  States  willing  to  receive  the  same 
at  par.    And  said  treasury  notes  may  be  made  a  legal  tender  to  the 


UNITED    STATES    NOTES    AND    BONDS.  191 

same  extent  as  United  States  notes,  for  their  face  value,  excluding 
interest;  or  they  may  be  made  exchangeable  under  regulations  pre- 
scribed by  the  Secretary  of  the  Treasury,  by  the  holder  thereof,  at 
the  treasury  in  the  city  of  Washington,  or  at  the  office  of  any  assist- 
ant treasurer  or  depositary  designated  for  that  purpose,  for  United 
States  notes  equal  in  amount  to  the  treasury  notes  offered  for  ex- 
change, together  with  the  interest  accrued  and  due  thereon,  at  the 
date  of  interest  payment  next  preceding  such  exchange.  And  in 
lieu  of  any  amount  of  said  treasury  notes  thus  exchanged,  or  re- 
deemed or  paid  at  maturity,  the  Secretary  may  issue  an  equal 
amount  of  other  treasury  notes;  and  the  treasury  notes  so  ex- 
changed, redeemed  or  paid,  shall  be  canceled  and  destroyed  as  the 
Secretary  may  direct.  In  order  to  secure  certain  and  prompt  ex- 
changes of  United  States  notes  for  treasury  notes  when  required 
as  above  provided,  the  Secretary  shall  have  power  to  issue  United 
States  notes  to  the  amount  of  one  hundred  and  fifty  millions  of  dol- 
lars, which  may  be  used  if  necessary  for  such  exchanges;  but  no 
part  of  the  United  States  notes  authorized  by  this  section  shall  be 
issued  for  or  applied  to  any  other  purposes  than  said  exchanges; 
and  whenever  any  amount  shall  have  been  so  issued  and  applied, 
the  same  shall  be  replaced  as  soon  as  practicable  from  the  sales  of 
treasury  notes  for  United  States  notes. 

That  the  Secretary  of  the  Treasury  be,  and  he  is  hereby,  author- 
ized, if  required  by  the  exigencies  of  the  public  service,  for  the  pay- 
ment of  the  army  and  navy,  and  other  creditors  of  the  government, 
to  issue  on  the  credit  of  the  United  States  the  sum  of  one  hundred 
and  fifty  millions  of  dollars  of  United  States  notes,  including  the 
amount  of  such  notes  heretofore  authorized  by  the  joint  resolution 
approved  January  seventeen,  eighteen  hundred  and  sixty-three,  in 
such  form  as  he  may  deem  expedient,  not  bearing  interest,  payable 
to  bearer,  and  of  such  denominations,  not  less  than  one  dollar,  as  he 
may  prescribe,  which  notes  so  issued  shall  be  lawful  money  and  a 
legal  tender  in  payment  of  all  debts,  public  and  private,  within  the 
United  States,  except  for  duties  on  imports  and  interest  on  the  public 
debt;  and  any  of  the  said  notes,  when  returned  to  the  treasury,  may  be 
reissued  from  time  to  time  as  the  exigencies  of  the  public  service  may 
require.  And  in  lieu  of  any  of  said  notes,  or  any  other  United  States 
notes,  returned  to  the  treasury,  and  canceled  or  destroyed,  there  may 
be  issued  equal  amounts  of  United  States  notes,  such  as  are  author- 
ized by  this  act.  And  so  much  of  the  act  to  authorize  the  issue  of 
United  States  notes,  and  for  other  purposes,  approved  February 


192  HAND-BOOK    OF   FINANCE. 

twenty-five,  eighteen  hundred  and  sixty-two,  and  of  the  act  to 
authorize  an  additional  issue  of  United  States  notes,  and  for  other 
purposes,  approved  July  eleven,  eighteen  hundred  and  sixty-two,  as 
restricts  the  negotiation  of  bonds  to  market  value,  is  hereby  repealed. 
And  the  holders  of  United  States  notes,  issued  under  and  by  virtue 
of  said  acts,  shall  present  the  same  for  the  purpose  of  exchanging 
the  same  for  bonds,  as  therein  provided,  on  or  before  the  first  day  of 
July,  eighteen  hundred  and  sixty-three,  and  thereafter  the  right  so 
to  exchange  the  same  shall  cease  and  determine. 

That  in  lieu  of  postage  and  revenue  stamps  for  fractional  cur- 
rency, and  of  fractional  notes,  commonly  called  postage  currency, 
issued  or  to  be  issued,  the  Secretary  of  the  Treasury  may  issue  frac- 
tional notes  of  like  amounts  in  such  form  as  he  may  deem  expedient, 
and  may  provide  for  the  engraving,  preparation  and  issue  thereof 
in  the  treasury  department  building.  And  all  such  notes  issued 
shall  be  exchangeable  by  the  assistant  treasurers  and  designated 
depositaries  for  United  States  notes,  in  sums  not  less  than  three  dol- 
lars, and  shall  be  receivable  for  postage  and  revenue  stamps,  and 
also  in  payment  of  any  dues  to  the  United  States  less  than  five  dol- 
lars, except  duties  on  imports,  and  shall  be  redeemed  on  presenta- 
tion at  the  treasury  of  the  United  States  in  such  sums  and  under 
such  regulations  as  the  Secretary  of  the  Treasury  shall  prescribe: 
Provided,  that  the  whole  amount  of  fractional  currency  issued,  in- 
cluding postage  and  revenue  stamps  issued  as  currency,  shall  not 
exceed  fifty  millions  of  dollars. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized  to  receive 
deposits  of  gold  coin  and  bullion  with  the  treasurer  or  any  assistant 
treasurer  of  the  United  States,  in  sums  not  less  than  twenty  dollars, 
and  to  issue  certificates  therefor  in  denominations  of  not  less  than 
twenty  dollars  each,  corresponding  with  the  denominations  of  the 
United  States  notes.  The  coin  and  bullion  deposited  for  or  repre- 
senting the  certificates  of  deposit  shall  be  retained  in  the  treasury 
for  the  payment  of  the  same  on  demand.  And  certificates  repre- 
senting coin  in  the  treasury  may  be  issued  in  payment  of  interest  on 
the  public  debt,  which  certificates,  together  with  those  issued  for 
coin  and  bullion  deposited,  shall  not  at  any  time  exceed  twenty  per 
centum  beyond  the  amount  of  coin  and  bullion  in  the  treasury;  and 
the  certificates  for  coin  or  bullion  in  the  treasury  shall  be  received  at 
par  in  payment  for  duties  on  imports. 


UNITED    STATES    NOTES    AND    BONDS.  193 

Act  March  3,  1864. 

That  in  lieu  of  so  much  of  the  loan  authorized  by  the  act  of 
March  3, 1863,  the  Secretary  of  the  Treasury  be  and  is  hereby  author- 
ized to  borrow,  on  the  credit  of  the  United  States,  not  exceeding  two 
hundred  millions  of  dollars  during"  the  current  fiscal  year,  bearing" 
date  March  first,  eighteen  hundred  and  sixty-four,  or  any  subsequent 
period,  redeemable  at  the  pleasure  of  the  government  after  any 
period  not  less  than  five  years,  and  payable  at  any  period  not  more 
than  forty  years  from  date,  in  coin,  bearing  interest  not  exceeding 
six  per  centum  a  year — and  he  may  dispose  of  such  bonds  at  any 
time,  on  such  terms  as  he  may  deem  most  advisable,  for  lawful 
money  of  the  United  States,  or,  at  his  discretion,  for  treasury  notes, 
certificates  of  indebtedness  or  certificates  of  deposit  issued  under  any 
act  of  Congress. 

Joint  Resolution  March  17,  1864. 

That  the  Secretary  of  the  Treasury  be  authorized  to  anticipate  the 
payment  of  interest  on  the  public  debt,  by  a  period  not  exceeding 
one  year,  from  time  to  time,  either  with  or  without  a  rebate  of 
interest  upon  the  coupons,  as  to  him  may  seem  expedient,  and  he  is 
hereby  authorized  to  dispose  of  any  gold  *  in  the  Treasury  of  the 
United  States  not  necessaiy  for  the  payment  of  interest  on  the 
public  debt. 

Act  June  30,  1864. 

That  the  Secretary  of  the  Treasury  be  authorized  to  borrow  four 
hundred  millions  of  dollars,  and  to  issue  bonds  of  the  United  States, 
redeemable  at  the  pleasure  of  the  government  after  any  period  not 
less  than  five  nor  more  than  forty  years  from  date,  and  bear  an 
annual  interest  not  exceeding  six  per  centum,  payable  semi-annually 
in  coin.  . 

The  Secretary  of  the  Treasury  may  issue  on  the  credit  of  the  United  I 
States,  and  in  lieu  of  an  equal  amount  of  bonds  authorized  by  the  ; 
preceding  section,  and  as  a  part  of  said  loan,  not  exceeding  two  I 
hundred  millions  of  dollars,  in  treasury  notes  of  any  denomination  I 
not  less  than  ten  dollars,  payable  at  any  time  not  exceeding  three  1 
years  from  date,  or,  if  thought  more  expedient,  redeemable  at  any 
time  after  three  years  from  date,  and  bearing  interest  not  exceeding 

*  This  is  the  first  instance  of  the  use  of  the  word  "  gold  "  instead  of  "  coin  * 
or  "yoldand  silver"  in  any  of  the  laws  of  the  United  States  with  regard  to 
money  obligations  of  the  government  issued  since  1800. 


194 


HAKD-BOOK    OF    FIN"A^"CE. 


/the  rate  of  seven  and  three-tenths  per  centum,  payable  in  lawful 
money  at  maturity.  And  such  of  them  as  shall  be  made  payable, 
principal  and  interest,  at  maturity,  shall  be  a  legal  tender  to  the 
same  extent  as  United  States  notes,  for  their  face  value,  excluding 
interest,  and  may  be  paid  to  any  creditor  of  the  United  States  at 
then  face  value,  excluding  interest,  or  to  any  creditor  ivilling  to  receive 
them  at  par,  including  interest. 

That  the  total  amount  of  bonds  and  treasury  notes  authorized  by 
the  first  and  second  sections  of  this  act  shall  not  exceed  four  hundred 
millions  of  dollars,  in  addition  to  the  amounts  heretofore  issued;  nor 
shall  the  total  amount  of  United  States  notes,  issued  or  to  be  issued, 
ever  exceed  four  hundred  millions  of  dollars,  and  such  additional 
sum,  not  exceeding  fifty  millions  of  dollars,  as  may  be  temporarily 
required  for  the  redemption  of  temporary  loan;  nor  shall  any 
treasury  note  bearing  interest,  issued  under  this  act,  be  a  legal  tender 
in  payment  or  redemption  of  any  notes  issued  by  any  bank,  banking 
association,  or  banker,  calculated  or  intended  to  circulate  as  money. 

The  Secretary  of  the  Treasury  may  issue  notes  of  the  fractions  of  a 
dollar  as  now  used  for  currency,  in  such  form,  with  such  inscriptions, 
and  with  such  safeguards  against  counterfeiting,  as  he  may  judge 
best;  but  the  whole  amount  of  all  descriptions  of  notes  or  stamps 
less  than  one  dollar  issued  as  currency,  shall  not  exceed  fifty  millions 
of  dollars. 


Amendment  to  Pacific  Railroad  Act,  July  2,  1864. 

That  section  five  of  said  act  be  so  modified  and  amended  that  the 
Union  Pacific  Railroad  Company,  the  Central  Pacific  Railroad  Com- 
pany, and  any  other  company  authorized  to  participate  in  the  con- 
struction of  said  road,  may,  on  the  completion  of  each  section  of  said 
road,  as  provided  in  this  act  and  the  act  to  which  this  act  is  an 
amendment,  issue  their  first  mortgage  bonds  on  their  respective 
railroad  and  telegraph  lines  to  an  amount  not  exceeding  the  amount 
of  the  bonds  of  the  United  States,  and  of  even  tenor  and  date,  time 
of  maturity,  rate  and  character  of  interest,  with  the  bonds  author- 
ized to  be  issued  to  said  railroad  companies  respectively.  And  the 
Hen  of  the  United  States  bonds  shall  be  subordinate  to  that  of  the 
bonds  of  any  or  either  of  said  companies  hereby  authorized  to  be 
issued  on  their  respective  roads,  property  and  equipments,  except  as 
to  the  provisions  of  the  sixth  section  of  the  act  to  which  this  act  is 
an  amendment,  relating  to  the  transmission  of  dispatches  and  the 


UNITED   STATES   NOTES   AND   BONDS.  195 

transportation  of  mails,  troops,  munitions  of  war,  supplies  and  pub- 
lic stores  for  the  government  of  the  United  States. 

Act  January  28,  1865. 

That  in  lieu  of  any  bonds  authorized  to  be  issued  by  the  first 
section  of  the  act  entitled  "  An  act  to  provide  ways  and  means  for 
the  support  of  the  government,"  approved  June  30,  1864,  that  may 
remain  unsold  at  the  date  of  this  act,  the  Secretary  of  the  Treasury 
may  issue,  under  the  authority  of  said  act,  treasury  notes  of  the 
description  and  character  authorized  by  the  second  section  of  said  act: 
Provided,  That  the  whole  amount  of  bonds  authorized  as  aforesaid  and 
treasury  notes  issued  and  to  be  issued  in  lieu  thereof  shall  not  exceed 
the  sum  of  four  hundred  millions  of  dollars;  and  such  treasury  notes 
may  be  disposed  of  for  lawful  money,  or  for  any  other  treasury  notes 
or  certificates  of  indebtedness  or  certificates  of  deposit  issued  under 
any  previous  act  of  Congress;  and  such  notes  shall  be  exempt  from 
taxation  by  or  under  State  or  municipal  authority. 

Act  March  3,  1865. 

That  the  Secretary  of  the  Treasury  be,  and  he  is  hereby,  author- 
ized to  borrow,  from  time  to  time,  on  the  credit  of  the  United  States, 
in  addition  to  the  amounts  heretofore  authorized,  any  sums  not 
exceeding,  in  the  aggregate,  six  hundred  millions  of  dollars,  and  to 
issue  therefor  bonds  or  treasury  notes  of  the  United  States  in  such 
form  as  he  may  prescribe;  and  so  much  thereof  as  may  be  issued  in 
bonds  shall  be  of  denominations  not  less  than  fifty  dollars,  and  may 
be  made  payable  at  any  period  not  more  than  forty  years  from  date 
of  issue,  or  may  be  made  redeemable,  at  the  pleasure  of  the  govern- 
ment, at  or  after  any  period  not  less  than  five  years  nor  more  than 
forty  years  from  date,  or  may  be  made  redeemable  and  payable  as 
aforesaid,  as  may  be  expressed  upon  their  face;  and  so  much  thereof 
as  may  be  issued  in  treasury  notes  may  be  made  convertible  into  any 
bonds  authorized  by  this  act. 

Provided,  That  the  rate  of  interest  on  any  such  bonds  or  treasury 
notes,  when  payable  in  coin,  shall  not  exceed  six  per  centum  per 
annum;  and  when  not  payable  in  com  shall  not  exceed  seven  and 
three-tenths  per  centum  per  annum. 

Provided,  That  nothing  herein  contained  shall  be  construed  as 
authorizing  the  issue  of  legal-tender  notes  in  any  form. 


196  HAND-BOOK   OF   FINANCE. 

Act  April  12,  1866. 

That  the  act  approved  March  3,  1865,  shall  be  extended  and  con- 
strued to  authorize  the  Secretary  of  the  Treasury,  at  his  discretion,  to 
receive  any  treasury  notes  or  other  obligations  issued  under  any  act 
of  Congress,  whether  bearing  interest  or  not,  in  exchange  for  any 
description  of  bonds  authorized  by  the  act  to  which  this  is  an  amend- 
ment; and  also  to  dispose  of  any  description  of  bonds  authorized  by 
said  act,  either  in  the  United  States  or  elsewhere,  to  such  an  amount, 
in  such  manner  and  at  such  rates  as  he  may  think  advisable,  for 
lawful  money  of  the  United  States  or  for  any  treasury  notes,  certifi- 
cates of  indebtedness  or  certificates  of  deposit,  or  other  representa- 
tives of  value  which  have  been  or  which  may  be  issued  under  any 
act  of  Congress,  the  proceeds  thereof  to  be  used  only  for  retiring 
treasury  notes  or  other  obligations  issued  under  any  act  of  Congress; 
but  nothing  herein  contained  shall  be  construed  to  authorize  any 
increase  of  the  public  debt:  Provided,  That  of  United  States  notes 
not  more  than  ten  millions  of  dollars  may  be  retired  and  canceled 
within  six  months  from  the  passage  of  this  act,  and  thereafter  not 
more  than  four  millions  of  dollars  in  any  one  month. 

Act  March  2,  1861. 

That  for  the  purpose  of  redeeming  and  retiring  any  compound- 
interest  notes  outstanding,  the  Secretary  of  the  Treasury  is  hereby 
authorized  and  directed  to  issue  temporary  loan  certificates  in  the 
manner  prescribed  by  section  four  of  the  act  entitled  "An  act  to 
authorize  the  issue  of  United  States  notes  and  for  the  redemption 
or  funding  thereof,  and  for  funding  the  floating  debt  of  the  United 
States/1  approved  February  twenty-fifth,  eighteen  hundred  and 
sixty-two;  bearing  interest  at  a  rate  not  exceeding  three  per  centum 
per  annum,  principal  and  interest  payable  in  lawful  money  on 
demand;  and  said  certificates  of  temporary  loan  may  constitute  and 
be  held,  by  any  national  bank  holding  or  owning  the  same,  as  a  part 
of  the  reserve  provided  for  in  sections  thirty- one  and  thirty-two  of 
the  act  entitled  ' '  An  act  to  provide  a  national  currency,  secured  by 
a  pledge  of  United  States  bonds,  and  to  provide  for  the  circulation 
and  redemption  thereof:"  Provided,  that  the  amount  of  such  certifi- 
cates outstanding  at  any  time  shall  not  exceed  fifty  millions  of  dollars. 

Act  July  25,  1868. 

That  for  the  sole  purpose  of  redeeming  and  retiring  the  remainder 
of  the  compound  interest  notes  outstanding,  the  Secretary  of  the 


UNITED    STATES   NOTES   AND    BONDS.  197 

Treasury  is  authorized  to  issue  an  additional  amount  of  temporary 
loan  certificates  not  exceeding  twenty-five  millions  of  dollars,  said  cer- 
tificates to  bear  three  per  cent  interest,  payable  in  lawful  money 

An  Act  to  strengthen  the  public  credit,  approved  March  18, 1869.         ""t*^ 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  ' 
United  States  of  America,  in  Congress  assembled :  That  in  order  to 
remove  any  doubt  as  to  the  purpose  of  the  government  to  discharge 
all  just  obligations  to  the  public  creditors,  and  to-  settle  conflicting 
questions  and  interpretations  by  the  laws  by  virtue  of  which  such 
obligations  have  been  contracted,  it  is  hereby  provided  and  declared 
that  the  faith  of  the  United  States  is  solemnly  pledged  to  the  pay- 
ment in  coin  or  its  equivalent  of  all  the  obligations  of  the  United 
States  not  bearing  interest,  known  as  the  United  States  notes,  and  of 
all  the  interest-bearing  obligations  of  the  United  States,  except  in 
cases  where  the  law  authorizing  the  issue  of  such  obligations  has 
expressly  provided  that  the  same  may  be  paid  in  lawful  money,  or 
other  currency  than  gold  and  silver.  But  none  of  said  interest- bear-  » 
ing  obligations  not  already  due  shall  be  redeemed  or  paid  before 
maturity,  unless  at  such  time  United  States  notes  shall  be  converti- 
ble into  coin  at  the  option  of  the  holder,  or  unless  at  such  time  bonds 
of  the  United  States  bearing  a  lower  rate  of  interest  than  the  bonds 
to  be  redeemed  can  be  sold  at  par  in  coin.  And  the  United  States 
also  solemnly  pledges  its  faith  to  make  provisions  at  the  earliest 
practicable  period  for  the  redemption  of  the  United  States  notes  in 
coin. 

Funding  Act  July  14,  1810. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized  to  issue  in 
a  sum  or  sums  not  exceeding  in  the  aggregate  two  hundred  millions 
of  dollars,  coupon  or  registered  bonds  of  the  United  States,  in  such 
form  as  he  may  prescribe,  and  of  denominations  of  fifty  dollars,  or 
some  multiple  of  that  sum,  redeemable  in  coin  of  the  present  stand- 
ard value,  at  the  pleasure  of  the  United  States,  after  ten  years  from 
the  date  of  their  issue,  and  bearing  interest,  payable  semi-annually 
in  such  coin,  at  the  rate  of  five  per  cent  per  annum ;  also  a  sum  or 
sums  not  exceeding  in  the  aggregate  three  hundred  millions  of  dollars 
of  like  bonds,  the  same  in  all  respects,  but  payable  at  the  pleasure 
of  the  United  States,  after  fifteen  years  from  their  issue,  and  bearing 
interest  at  the  rate  of  four  and  a  half  per  cent  per  annum;  also  a 
sum  or  sums  not  exceeding  in  the  aggregate  one  thousand  millions  of 


198  HAND-BOOK   OF   FINANCE. 

dollars  of  like  bonds,  the  same  in  all  respects,  but  payable  at  the 
pleasure  of  the  United  States  after  thirty  years  from  the  date  of 
their  issue,  and  bearing  interest  at  the  rate  ot  four  per  cent  per 
annum;  all  of  which  said  several  classes  of  bonds  and  the  interest 
thereon  shall  be  exempt  from  the  payment  of  all  taxes  or  duties  of 
the  United  States,  as  well  as  from  taxation  in  any  form  by  or  under 
State,  municipal  or  local  authority;  and  the  said  bonds  shall  have 
set  forth  and  expressed  upon  their  face  the  above -specified  condi- 
tions, and  shall,  with  their  cc  pons,  be  made  payable  at  the  Treasury 
of  the  United  States.  But  nothing  in  this  act,  or  in  any  other  law 
now  in  force,  shall  be  construed  to  authorize  any  increase  whatever 
of  the  bonded  debt  of  the  United  States. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized  to  sell  and 
dispose  of  any  of  the  bonds  issued  under  this  act,  at  not  less  than 
their  par  value  for  coin,  and  to  apply  the  proceeds  thereof  to  the 
redemption  of  any  of  the  bonds  of  the  United  States  outstanding, 
and  known  as  five-twenty  bonds,  at  their  par  value;  or  he  may 
exchange  the  same  for  such  five-twenty  bonds,  par  for  par;  but  the 
bonds  hereby  authorized  shall  be  used  for  no  other  purpose  whatso- 
ever. And  a  sum  not  exceeding  one-half  of  one  per  cent  of  the 
bonds  herein  authorized  is  hereby  appropriated  to  pay  the  expense 
of  preparing,  issuing,  advertising  and  disposing  of  the  same. 

That  the  payment  of  any  of  the  bonds  hereby  authorized  after  the 
expiration  of  the  said  several  terms  of  ten,  fifteen  and  thirty  years, 
shall  be  made  in  amounts  to  be  determined  from  time  to  time  by  the 
Secretary  of  the  Treasury  at  his  discretion,  the  bonds  so  to  be  paid  to 
be  distinguished  and  described  by  the  dates  and  numbers,  beginning 
for  each  successive  payment  with  the  bonds  of  each  class  last  dated 
and  numbered,  of  the  time  of  which  intended  payment  or  redemp- 
tion the  Secretary  of  the  Treasury  shall  give  public  notice,  and  the 
interest  on  the  particular  bonds  so  selected  at  any  time  to  be  paid 
shall  cease  at  the  expiration  of  three  months  from  the  date  of  such 
notice. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized,  with  any 
coin  in  the  Treasury  of  the  United  States  which  he  may  lawfully 
apply  to  such  purpose,  or  which  may  be  derived  from  the  sale  of  any 
of  the  bonds,  the  issue  of  which  is  provided  for  in  this  act,  to  pay  at 
par  and  cancel  any  six  per  cent  bonds  of  the  United  States  of  the 
kind  known  as  five-twenty  bonds,  which  have  become  or  shall  here- 
after become  redeemable  by  the  terms  of  their  issue.  But  the  par- 
ticular bonds  so  to  be  paid  and  canceled  shall  in  all  cases  be  indi- 


UNITED   STATES   NOTES   AND   BONDS.  199 

cated  and  specified  by  class,  date  and  number,  in  the  order  of  their 
numbers  and  issue,  beginning-  with  the  first  numbered  and  issued,  in 
public  notice  to  be  given  by  the  Secretary  of  the  Treasury,  and  in 
three  months  after  the  date  of  such  public  notice  the  interest  on  the 
bonds  so  selected  and  advertised  to  be  paid  shall  cease. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized,  at  any 
time  within  two  years  from  the  passage  of  this  act,  to  receive  gold 
coin  of  the  United  States  on  deposit  for  not  less  than  thirty  days,  in 
sums  of  not  less  than  one  hundred  dollars,  with  the  Treasurer,  or  any 
assistant  treasurer  of  the  United  States  authorized  by  the  Secretary 
of  the  Treasury  to  receive  the  same,  who  shall  issue  therefor  certifi- 
cates of  deposit,  made  in  such  form  as  the  Secretary  of  the  Treasury 
shall  prescribe,  and  said  certificates  of  deposit  shall  bear  interest  at 
a  rate  not  exceeding  two  and  a  half  per  cent  per  annum;  and  any 
amount  of  gold  coin  so  deposited  may  be  withdrawn  from  deposit 
at  any  time  after  thirty  days  from  the  date  of  deposit,  and  after 
ten  days'  notice  and  on  the  return  of  said  certificates:  Provided, 
That  the  interest  on  all  such  deposits  shall  cease  and  deter- 
mine at  the  pleasure  of  the  Secretary  of  the  Treasury.  And  not 
less  than  twenty-five  per  cent  of  the  coin  deposited  for  or  repre- 
sented by  said  certificates  of  deposit  shall  be  retained  in  the 
treasury  for  the  payment  of  said  certificates;  and  the  excess  beyond 
twenty-five  per  cent  may  be  applied,  at  the  discretion  of  the  Secretary 
of  the  Treasury,  to  the  payment  or  redemption  of  such  outstanding 
bonds  of  the  United  States  heretofore  issued  and  known  as  the  five- 
twenty  bonds,  as  he  may  designate  under  the  provisions  of  the  fourth 
section  of  this  act;  and  any  certificates  of  deposit  issued  as  aforesaid 
may  be  received  at  par,  with  the  interest  accrued  thereon,  in  payment 
for  any  bonds  authorized  to  be  issued  by  this  act. 

Act  January  20,  1871. 

That  the  amount  of  bonds  authorized  by  the  act  approved  July 
14,  1870,  entitled  "An  act  to  authorize  the  refunding  of  the  national 
debt,"  to  be  issued  bearing  five  per  centum  interest  per  annum,  be, 
and  the  same  is,  increased  to  five  hundred  millions  of  dollars,  and 
the  interest  of  any  portion  of  the  bonds  issued  under  said  act,  or  this 
act,  may,  at  the  discretion  of  the  Secretary  of  the  Treasury,  be  made 
payable  quarter-yearly:  Provided,  however,  that  this  act  shall  not  be 
construed  to  authorize  any  increase  of  the  total  amount  of  bonds  pro- 
vided for  by  the  act  to  which  this  act  is  an  amendment. 


200  HA^D-BOOK   OF   FINANCE. 

Act  June  8,  1872. 

That  the  Secretary  of  the  Treasury  is  hereby  authorized  to  receive 
United  States  notes  on  deposit  without  interest  from  banking  associ- 
ations, and  to  issue  certificates  therefor.  The  certificates  issued  may 
be  held  and  counted  by  national  banks  as  part  of  their  reserve. 

That  nothing  contained  in  this  act  shall  be  construed  to  authorize 
any  expansion  or  contraction  of  the  currency;  and  the  United  States 
notes  for  which  such  certificates  are  issued,  or  other  United  States 
notes  of  like  amount,  shall  be  held  as  special  deposits  in  the  treas- 
ury and  used  only  for  the  redemption  of  such  certificates. 

Act  December  17,  1873. 

That  for  the  purpose  of  redeeming  the  bonds  called  the  loan  of 
1858,  it  is  hereby  declared  to  be  the  pleasure  of  the  United  States  to 
pay  all  the  coupon  bonds  of  said  loan  on  the  first  day  of  January, 
1874.  That  the  Secretary  of  the  Treasury  may  issue  an  equal 
amount  at  par  of  principal  and  interest  of  five  per  cent  bonds  of  the 
funded  loan  under  the  act  for  refunding  the  national  debt,  approved 
January  20,  1871,  for  any  of  the  bonds  of  the  loan  of  1858,  which  the 
holders  thereof  may,  on  or  before  the  1st  of  February,  1874,  elect  to 
exchange. 

Specie  Resumption  Act  of  January  14,  1875. 

§  1.  That  the  Secretary  of  the  Treasury  is  hereby  authorized  and 
required,  as  rapidly  as  practicable,  to  cause  to  be  coined  at  the  mints 
of  the  United  States,  silver  coins  of  the  denominations  of  ten, 
twenty-five  and  fifty  cents,  of  standard  value,  and  to  issue  them  in 
redemption  of  an  equal  number  and  amount  of  fractional  currency 
of  similar  denominations,  or,  at  his  discretion,  he  may  issue  such 
silver  coins  through  the  mints,  the  subtreasuries,  public  depositories 
and  post-offices  of  the  United  States;  and  upon  such  issue  he  is 
hereby  authorized  and  required  to  redeem  an  equal  amount  of  such 
fractional  currency  until  the  whole  amount  of  such  fractional  cur- 
rency outstanding  shall  be  redeemed. 

§  2.  That  so  much  of  section  3524  of  the  Revised  Statutes  of  the 
United  States  as  provides  for  a  charge  of  one  sixth  of  one  per  centum 
for  converting  standard  gold  bullion  into  coin  is  hereby  repealed,  and 
hereafter  no  charge  shall  be  made  for  that  service. 

§  3.  That  section  5777  of  the  Revised  Statutes  of  the  United 
States,  limiting  the  aggregate  amount  of  the  circulating  notes  of 
the  national  banking  associations,  be,  and  is  hereby,  repealed,  and 


UNITED   STATES   NOTES   AND   BO  NTS.  201 

each  existing  banking  association  may  increase  its  circulating  notes 
in  accordance  with  the  existing  law,  without  respect  to  said  aggre- 
gate limit;  and  new  banking  associations  may  be  organized  in  ac- 
cordance with  the  existing  law,  without  respect  to  the  aggregate 
limit;  and  the  provisions  of  the  law  for  the  withdrawal  and  redis- 
tribution of  national- bank  currency  among  the  several  States  and 
Territories  are  hereby  repealed;  and  whenever  and  so  often  as  circu- 
lating notes  shall  be  issued  to  any  such  banking  association,  so  in- 
creasing its  capital  or  circulating  notes,  or  so  newly  organized  as 
aforesaid,  it  shall  be  the  duty  of  the  Secretary  of  the  Treasury  to 
redeem  the  legal-tender  United  States  notes  in  excess  only  of  $300,- 
000,000  to  the  amount  of  eighty  per  centum  of  the  sum  of  national- 
bank  notes  so  issued  to  any  such  banking  association  as  aforesaid, 
and  to  continue  such  redemption  as  such  circulating  notes  are  issued 
until  there  shall  be  outstanding  the  sum  of  $300,000,000  of  such 
legal-tender  United  States  notes,  and  no  more.  And  on  and  after 
the  1st  day  of  January,  a.d.  1879,  the  Secretary  of  the  Treasury  shall 
redeem  in  coin  the  United  States  legal-tender  notes  then  outstand- 
ing on  their  presentation  for  redemption  at  the  office  of  the  assistant 
treasurer  of  the  United  States,  in  the  city  of  New  York,  in  sums  of 
not  less  than  $50.  And  to  enable  the  Secretary  of  the  Treasury  to 
prepare  and  provide  for  the  redemption  in  this  act  authorized  or 
required,  he  is  authorized  to  use  any  surplus  revenues  from  time  to 
time  in  the  treasury  not  otherwise  appropriated,  and  to  issue,  sell 
and  dispose  of,  at  not  less  than  par  in  coin,  either  of  the  description 
of  bonds  of  the  United  States  described  in  the  act  of  Congress  ap- 
proved July  14,  1870,  entitled  "An  act  to  authorize  the  refunding  of 
the  national  debt,"  with  like  privileges  and  exemptions,  to  the  ex- 
tent necessary  to  carry  this  act  into  effect,  and  to  use  the  proceeds 
thereof  for  the  purposes  aforesaid.  And  all  provisions  of  law  incon- 
sistent with  the  provisions  of  this  act  are  hereby  repealed. 

Subsidiary  Silver  Coin  Law,  Joint  Resolution  of  Congress  July  13, 
1816'. 
§  1.  That  the  Secretary  of  the  Treasury,  under  such  limits  and 
regulations  as  will  best  secure  a  just  and  fair  distribution  of  the  same 
through  the  country,  may  issue  the  silver  coin  at  any  time  in  the 
treasury,  to  an  amount  not  exceeding  $10,000,000,  in  exchange  for 
an  equal  amount  of  legal-tender  notes,  and  notes  so  received  in  ex- 
change shall  be  kept  as  a  special  fund,  separate  and  apart  from  all 
other  money  in  the  treasury,  and  be  issued  only  upon  the  retirement 


202  HAND-BOOK    OF    FINANCE. 

and  destruction  of  a  like  sum  of  fractional  currency  received  at  the 
treasury  in  payment  of  dues  to  the  United  States,  and  said  fractional 
currency,  when  so  substituted,  shall  be  destroyed  and  held  as  part 
of  the  sinking  fund,  as  provided  in  the  act  approved  April  17,  1876. 

§  2.  That  the  trade  dollar  shall  not  hereafter  be  a  legal  tender, 
and  the  Secretary  of  the  Treasury  is  hereby  authorized  to  limit  from 
time  to  time  the  coinage  thereof  to  such  an  amount  as  he  may  deem 
sufficient  to  meet  the  export  demand  for  the  same. 

§  3.  That  in  addition  to  the  amount  of  subsidiary  silver  coin 
authorized  by  law  to  be  issued  in  redemption  of  the  fractional  cur- 
rency, it  shall  be  lawful  to  manufacture  at  the  several  mints,  and 
issue  through  the  treasury  and  its  several  offices,  such  coin  to  an 
amount  that,  including  the  amount  of  subsidiary  silver  coin  and  of 
fractional  currency  outstanding,  shall  in  the  aggregate  not  exceed  at 
any  time  $50,000,000. 

§  4.  That  the  silver  bullion  required  for  the  purposes  of  this  act 
shall  be  purchased  from  time  to  time  at  the  market  rate  by  the  Sec- 
retary of  the  Treasury  with  any  money  in  the  treasury  not  otherwise 
appropriated,  but  no  purchase  of  bullion  shall  be  made  under  this 
resolution  when  the  market  rate  for  the  same  shall  be  such  as  will 
not  admit  of  the  coinage  and  issue  as  herein  provided  without  loss 
to  the  treasury,  and  any  gain  or  seigniorage  arising  from  this  coin- 
age shall  be  accounted  for  and  paid  into  the  treasury  as  provided 
under  existing  laws  relative  to  subsidiary  coinage,  provided  that  the 
amount  of  money  at  any  time  invested  in  such  silver  bullion,  exclu- 
sive of  such  resulting  coin,  shall  not  exceed  $200,000. 


NATIONAL  BANKS  AND  BANK  CURRENCY. 


LAWS  IN  FORCE  AUGUST,  1876. 

THE  following  compilation  embraces  all  the  laws  in 
force  August,  1876,  governing  the  organization  and 
management  of  national  banks  and  the  issue  and  re- 
demption of  national-bank  currency,  under  the  following 
heads,  viz. : 

Chapter  I.  Organization  and  Powers  of  National  Banks. 

II.  Obtaining-  and  Issuing  Circulating  Notes. 

III.  Regulation  of  the  Banking  Business. 

IV.  Dissolution  and  Receivership. 

V.  Tax  on  Circulation  and  on  Bank  Checks. 
VI.   Crimes  and  Misdemeanors. 
VII.   Interest  Laws. 

The  numbers  of  the  sections  are  the  same  as  in  the 
Revised  Statutes. 

CHAPTER  I. 

ORGANIZATION  AND   POWERS  OP   NATIONAL  BANKS. 

(Sec.  5133.)  Associations  for  carrying  on  the  business   J^0™^™ 
of  banking  under  this  title  may  be  formed  by  any  num-    banking 
ber  of  natural  persons,  not  less  in  any  case  than  five.    JJUS^*" 
They  shall  enter  into  articles  of  association,  which  shall 
specify  in  general  terms  the  object  for  which  the  associa-    Artfcles  of 
tion  is  formed,  and  may  contain  any  other  provisions,    tion. 
not  inconsistent  with  law,  which  the  association  may  see 
fit  to  adopt  for  the  regulation  of  its  business  and  the 
conduct  of  its  affairs.    These  articles  shall  be  signed  by 


204 


hand-book  of  finance. 


Organiza- 
tion 
certificate. 


Name  of 
associa- 
tion. 


Place  of 

business. 


Capital 
stock. 

Share- 
holders. 


Object  of 
certificate. 


Acknowl- 
edgment of 
organiza- 
tion 
certificate. 


Corporate 
powers  of 
associa- 
tions. 

2Abb.,U.SM 
416. 


Seal. 
Succession. 


the  persons  uniting  to  form  the  association,  and  a  copy 
of  them  shall  be  forwarded  to  the  Comptroller  of  the 
Currency,  to  be  filed  and  preserved  in  his  office. 

(Sec.  5134.)  The  persons  uniting-  to  form  such  an 
association  shall,  under  their  hands,  make  an  organiza- 
tion certificate,  which  shall  specifically  state : 

First.  The  name  assumed  by  such  association ;  which 
name  shall  be  subject  to  the  approval  of  the  Comptroller 
of  the  Currency. 

Second.  The  place  where  its  operations  of  discount 
and  deposit  are  to  be  carried  on,  designating  the  State, 
Territory,  or  district,  and  the  particular  county  and  city, 
town,  or  village. 

Third.  The  amount  of  capital  stock  and  the  number 
of  shares  into  which  the  same  is  to  be  divided. 

Fourth.  The  names  and  places  of  residence  of  the 
shareholders,  and  the  number  of  shares  held  by  each  of 
them. 

Fifth.  The  fact  that  the  certificate  is  made  to  enable 
such  persons  to  avail  themselves  of  the  advantages  of 
this  title. 

(Sec.  5135.)  The  organization  certificate  shall  be 
acknowledged  before  a  judge  of  some  court  of  record,  or 
notary  public;  and  shall  be,  together  with  the  acknowl- 
edgment thereof,  authenticated  by  the  seal  of  such  court, 
or  notary,  transmitted  to  the  Comptroller  of  the  Cur- 
rency, who  shall  record  and  carefully  preserve  the  same 
in  his  office. 

(Sec.  5136.)  Upon  duly  making  and  filing  articles  of 
association  and  an  organization  certificate,  the  associa- 
tion shall  become,  as  from  the  date  of  the  execution  of 
its  organization  certificate,  a  body  corporate,  and  as 
such,  and  in  the  name  designated  in  the  organization 
certificate,  it  shall  have  power: 

First.   To  adopt  and  use  a  corporate  seal. 

Second.  To  have  succession  for  the  period  of  twenty 
years  from  its  organization,  unless  it  is  sooner  dissolved 
according  to  the  provisions  of  its  articles  of  association, 
or  by  the  act  of  its  shareholders  owning  two-thirds  of  its 
stock,  or  unless  its  franchise  becomes  forfeited  by  some 
violation  of  law. 


NATIONAL   BANKS   AND   BANK   CURRENCY. 


205 


Third.  To  make  contracts. 

Fourth.  To  sue  and  be  sued,  complain  and  defend,  in 
any  court  of  law  and  [or]  equity,  as  fully  as  natural 
persons. 

Fifth.  To  elect  or  appoint  directors,  and  by  its  board 
of  directors  to  appoint  a  president,  vice-president,  cash- 
ier, and  other  officers,  define  their  duties,  require  bonds 
of  them  and  fix  the  penalty  thereof,  dismiss  such  officers 
or  any  of  them  at  pleasure,  and  appoint  others  to  fill 
their  places. 

Sixth.  To  prescribe,  by  its  board  of  directors,  by-laws 
not  inconsistent  with  law,  regulating  the  manner  in 
which  its  stock  shall  be  transferred,  its  directors  elected 
or  appointed,  its  officers  appointed,  its  property  trans- 
ferred, its  general  business  conducted,  and  the  privileges 
granted  to  it  by  law  exercised  and  enjoyed. 

Seventh.  To  exercise  by  its  board  of  directors,  or  duly 
authorized  officers  or  agents,  subject  to  law,  all  such 
incidental  powers  as  shall  be  necessary  to  carry  on  the 
business  of  banking;  by  discounting  and  negotiating 
promissory  notes,  drafts,  bills  of  exchange,  and  other 
evidences  of  debt;  by  receiving  deposits;  by  buying  and 
selling  exchange,  coin  and  bullion;  by  loaning  money  on 
personal  security;  and  by  obtaining,  issuing  and  circu- 
lating notes  according  to  the  provisions  of  this  Title. 

But  no  association  shall  transact  any  business  except 
such  as  is  incidental  and  necessarily  preliminary  to  its 
organization,  until  it  has  been  authorized  by  the  Comp- 
troller of  the  Currency  to  commence  the  business  of 
banking. 

(Sec.  5137.)  A  national  banking  association  may 
purchase,  hold,  and  convey  real  estate  for  the  following 
purposes,  and  for  no  others : 

First.  Such  as  shall  be  necessary  for  its  immediate 
accommodation  in  the  transaction  of  its  business. 

Second.  Such  as  shall  be  mortgaged  to  it  in  good  faith 
by  way  of  security  for  debts  previously  contracted. 

Third.  Such  as  shall  be  conveyed  to  it  in  satisfaction 
of  debts  previously  contracted  in  the  course  of  its  deal- 
ings. 


Contracts. 
Suits. 


Appoint 
nient  of 
officers. 


By-laws. 


Incidental 
powers. 


When  may 
commence 

business. 


Power  to 
bold  real 
property. 


206 


HAKD-BOOK   OF   FIXAXCE. 


Limitation 
as  to  mort- 
gages, etc. 


Minimum 

capital 

required. 


Value  and 
transfer  of 
shares  of 
stock. 


Eights  and 
liabilities 
of  persons 
holding 
shares  by- 
transfer. 
Van  Allen 
vs.  The 
Assessors, 
3  Wall.  573. 


When  capi- 
tal stock 
must  be 
paid  in  and 
certified. 


Proceed- 
ings if 
shareholder 
fails  to  pay 
install- 
ments. 


Fourth.  Such  as  it  shall  purchase  at  sales  under 
judgments,  decrees  or  mortgages  held  by  the  association, 
or  shall  purchase  to  secure  debts  due  to  it. 

But  no  such  association  shall  hold  the  possession  of 
any  real  estate  under  mortgage,  or  the  title  and  posses- 
sion of  any  real  estate  purchased  to  secure  any  debts  due 
to  it,  for  a  longer  period  than  five  years. 

(Sec.  5138.)  No  association  shall  be  organized  under 
this  Title  with  a  less  capital  than  one  hundred  thousand 
dollars;  except  that  banks  with  a  capital  of  not  less  than 
fifty  thousand  dollars  may,  with  the  approval  of  the 
Secretary  of  the  Treasury,  be  organized  in  any  place  the 
population  of  which  does  not  exceed  six  thousand  inhab- 
itants. No  association  shall  be  organized  in  a  city  the 
population  of  which  exceeds  fifty  thousand  persons  with 
a  less  capital  than  two  hundred  thousand  dollars. 

(Sec.  5139.)  The  capital  stock  of  each  association 
shall  be  divided  into  shares  of  one  hundred  dollars  each, 
and  be  deemed  personal  property,  and  transferable  on 
the  books  of  the  association  in  such  manner  as  may  be 
prescribed  in  the  by-laws  or  articles  of  association. 
Every  person  becoming  a  shareholder  by  such  transfer 
shall,  in  proportion  to  his  shares,  succeed  to  all  the  rights 
and  liabilities  of  the  prior  holder  of  such  shares;  and  no 
change  shall  be  made  in  the  articles  of  association  by 
which  the  rights,  remedies  or  security  of  the  existing 
creditors  of  the  association  shall  be  impaired. 

(Sec.  5140.)  At  least  fifty  per  centum  of  the  capital 
stock  of  every  association  shall  be  paid  in  before  it  shall 
be  authorized  to  commence  business;  and  the  remainder 
of  the  capital  stock  of  such  association  shall  be  paid  in 
installments  of  at  least  ten  per  centum  each,  on  the 
whole  amount  of  the  capital,  as  frequently  as  one  install- 
ment at  the  end  of  each  succeeding  month  from  the  time 
it  shall  be  authorized  by  the  Comptroller  of  the  Currency 
to  commence  business;  and  the  payment  of  each  install- 
ment shall  be  certified  to  the  Comptroller,  under  oath, 
by  the  president  or  cashier  of  the  association. 

(Sec.  5141.)  Whenever  any  shareholder,  or  his 
assignee,  fails  to  pay  any  installment  on  the  stock  when 
the  same  is  required  by  the  preceding  section  to  be  paid, 


NATIONAL   BANKS   AND    BANK   CURRENCY. 


207 


the  directors  of  such  association  may  sell  the  stock  of 
such  delinquent  shareholder  at  public  auction,  having 
given  three  weeks'  previous  notice  thereof  in  a  news- 
paper published  and  of  general  circulation  in  the  city  or 
county  where  the  association  is  located,  or  if  no  news- 
paper is  published  in  said  city  or  county,  then  in  a  news- 
paper published  nearest  thereto,  to  any  person  who  will 
pay  the  highest  price  therefor,  to  be  not  less  than  the 
amount  then  due  thereon,  with  the  expenses  of  adver- 
tisement and  sale;  and  the  excess,  if  any,  shall  be  paid 
to  the  delinquent  shareholder.  If  no  bidder  can  be  found 
who  will  pay  for  such  stock  the  amount  due  thereon  to 
the  association,  and  the  cost  of  advertisement  and  sale, 
the  amount  previously  paid  shall  be  forfeited  to  the  asso- 
ciation, and  such  stock  shall  be  sold  as  the  directors  may 
order,  within  six  months  from  the  time  of  such  forfeiture, 
and  if  not  sold  it  shall  be  canceled  and  deducted  from 
the  capital  stock  of  the  association.  If  any  such  cancel- 
lation and  reduction  shall  reduce  the  capital  of  the  asso- 
ciation below  the  minimum  of  capital  required  by  law, 
the  capital  stock  shall,  within  thirty  days  from  the  date 
of  such  cancellation,  be  increased  to  the  required  amount; 
in  default  of  which  a  receiver  may  be  appointed,  accord- 
ing to  the  provisions  of  section  fifty-two  hundred  and 
tliirty-four,  to  close  up  the  business  of  the  association. 

(Sec.  5168.)  Whenever  a  certificate  is  transmitted  to 
the  Comptroller  of  the  Currency,  as  provided  in  this  Title, 
and  the  association  transmitting  the  same  notifies  the 
Comptroller  that  at  least  fifty  per  centum  of  its  capital 
stock  has  been  duly  paid  in,  and  that  such  association 
has  complied  with  all  the  provisions  of  this  Title  required 
to  be  complied  with  before  an  association  shall  be  author- 
ized to  commence  the  business  of  banking,  the  Comptrol- 
ler shall  examine  into  the  condition  of  such  association, 
ascertain  especially  the  amount  of  money  paid  in  on 
account  of  its  capital,  the  name  and  place  of  residence  of 
each  of  its  directors,  and  the  amount  of  the  capital  stock 
of  which  each  is  the  owner  in  good  faith,  and  generally 
whether  such  association  has  complied  with  all  the  pro- 
visions of  this  Title  required  to  entitle  it  to  engage  in  the 
business  of  banking;   and  shall  cause  to  be  made  and 


Capital  to 
be  restored 
if  reduced 
below  min- 
imum or 
receiver 
appointed. 


Comptrol- 
ler to  deter- 
mine if 
association 
isentitledto 
commence 
business. 


208 


HAND-BOOK    OF   FINANCE. 


Certificate 
of  officers 
and 
directors. 


Certificate 
of  authority 
to  com- 
mence 
business, 
when  to  be 
issued. 


When  cer- 
tificate of 
authority 
may  be 
withheld. 


Publication 
of  certifi- 
cate. 


Increase  of 

capital 

stock. 


attested  by  the  oaths  of  a  majority  of  the  directors,  and 
by  the  president  or  cashier  of  the  association,  a  statement 
of  all  the  facts  necessary  to  enable  the  Comptroller  to 
determine  whether  the  association  is  lawfully  entitled  to 
commence  the  business  of  banking. 

(Sec.  5169.)  If,  upon  a  careful  examination  of  the 
facts  so  reported,  and  of  any  other  facts  which  may  come 
to  the  knowledge  of  the  Comptroller,  whether  by  means 
of  a  special  commission  appointed  by  him  for  the  purpose 
of  inquiring  into  the  condition  of  such  association,  or 
otherwise,  it  appears  that  such  association  is  lawfully 
entitled  to  commence  the  business  of  banking,  the  Comp- 
troller shall  give  to  such  association  a  certificate,  under 
his  hand  and  official  seal,  that  such  association  has  com- 
plied with  all  the  provisions  required  to  be  complied  with 
before  commencing  the  business  of  banking,  and  that 
such  association  is  authorized  to  commence  such  business. 
But  the  Comptroller  may  withhold  from  an  association 
his  certificate  authorizing  the  commencement  of  business 
whenever  he  has  reason  to  suppose  that  the  shareholders 
have  formed  the  same  for  any  other  than  the  legitimate 
objects  contemplated  by  this  Title. 

(Sec.  5170.)  The  association  shall  cause  the  certificate 
issued  under  the  preceding  section  to  be  published  in 
some  newspaper  printed  in  the  city  or  county  where  the 
association  is  located  for  at  least  sixty  days  next  after  the 
issuing  thereof;  or,  if  no  newspaper  is  published  in  such 
city  or  county,  then  in  the  newspaper  published  nearest 
thereto. 

(Sec.  5142.)  Any  association  formed  under  this  Title 
may,  by  its  articles  of  association,  provide  for  an  increase 
of  its  capital  from  time  to  time,  as  may  be  deemed  expe- 
dient, subject  to  the  limitations  of  this  Title.  But  the 
maximum  of  such  increase  to  be  provided  in  the  articles 
of  association  shall  be  determined  by  the  Comptroller  of 
the  Currency;  and  no  increase  of  capital  shall  be  valid 
until  the  whole  amount  of  such  increase  is  paid  in,  and 
notice  thereof  has  been  transmitted  to  the  Comptroller 
of  the  Currency,  and  his  certificate  obtained  specifying 
the  amount  of  such  increase  of  capital  stock,  with  his 


NATIONAL    BANKS    AND    BANK    CURRENCY, 


^09 


approval  thereof,  and  that  it  has  been  duly  paid  in  as 
part  of  the  capital  of  such  association. 

(Sec.  5143.)  Any  association  formed  under  this  Title 
may,  by  the  vote  of  shareholders  owning  two- thirds  of 
its  capital  stock,  reduce  its  capital  to  any  sum  not  below 
the  amount  required  by  this  Title  to  authorize  the  forma- 
tion of  associations ;  but  no  such  reduction  shall  be  allow- 
able which  will  reduce  the  capital  of  the  association  below 
the  amount  required  for  its  outstanding  circulation,  nor 
shall  any  such  reduction  be  made  until  the  amount  of  the 
proposed  reduction  has  been  reported  to  the  Comptroller 
of  the  Currency  and  his  approval  thereof  obtained. 

(Sec.  5144.)  In  all  elections  of  directors,  and  in 
deciding  all  questions  at  meetings  of  shareholders,  each 
shareholder  shall  be  entitled  to  one  vote  on  each  share  of 
stock  held  by  him.  Shareholders  may  vote  by  proxies 
duly  authorized  in  writing;  but  no  officer,  clerk,  teller  or 
bookkeeper  of  such  association  shall  act  as  proxy;  and  no 
shareholder  whose  liability  is  past  due  and  unpaid  shall 
be  allowed  to  vote. 

(Sec.  5145.)  The  affairs  of  each  association  shall  be 
managed  by  not  less  than  five  directors,  who  shall  be 
elected  by  the  shareholders  at  a  meeting  to  be  held  at 
any  time  before  the  association  is  authorized  by  the 
Comptroller  of  the  Currency  to  commence  the  business  of 
banking;  and  afterward  at  meetings  to  be  held  on  such 
day  in  January  of  each  year  as  is  specified  therefor  in  the 
articles  of  association.  The  directors  shall  hold  office  for 
one  year,  and  until  their  successors  are  elected  and  have 
qualified. 

(Sec  5146.)  Every  director  must,  during  his  whole 
term  of  service,  be  a  citizen  of  the  United  States,  and  at 
least  three- fourths  of  the  directors  must  have  resided  in 
the  State,  Territory  or  District  in  which  the  association  is 
located  for  at  least  one  year  immediately  preceding  their 
election,  and  must  be  residents  therein  during  their  con- 
tinuance in  office.  Every  director  must  own,  in  his  own 
right,  at  least  ten  shares  of  the  capital  stock  of  the  asso- 
ciation of  which  he  is  a  director.  Any  director  who 
ceases  to  be  the  owner  of  ten  shares  of  the  stock,  or  who 


Reduction 
of  capital 
stock. 


Rights  of 
sharehold- 
ers to  vote 
at  elections. 

Proxies. 


Numb  ei- 
and  elec- 
tion of 
directors. 


Term  of 
office. 


Qualifica- 
tions of 
directors. 


9* 


210 


HAXD-BOOK    OF    FIXAXCE. 


Oath 
required 
from 
directors. 


Vacancies, 
how  filled. 


Proceed- 
ings where 
no  election 
is  held  on 
the  proper 
day. 


The 

president 
must  he  a 
director. 
Individual 
liability  of 
share- 
holders. 


becomes  in  any  other  manner  disqualified,  shall  thereby 
vacate  his  place. 

(Sec.  5147.)  Each  director,  when  appointed  or  elected, 
shall  take  an  oath  that  he  will,  so  far  as  the  duty  devolves 
on  him,  diligently  and  honestly  administer  the  affairs  of 
such  association,  and  will  not  knowingly  violate,  or  wil- 
lingly permit  to  be  violated,  any  of  the  provisions  of  this 
Title,  and  that  he  is  the  owner  in  good  faith,  and  in  his 
own  right,  of  the  number  of  shares  of  stock  required  by 
this  Title,  subscribed  by  him,  or  standing  in  his  name  on 
the  books  of  the  association,  and  that  the  same  is  not 
hypothecated,  or  in  any  way  pledged,  as  security  for  any 
loan  or  debt.  Such  oath,  subscribed  by  the  director 
making  it,  and  certified  by  the  officer  before  whom  it  is 
taken,  shall  be  immediately  transmitted  to  the  Comp- 
troller of  the  Currency,  and  shall  be  filed  and  preserved 
hi  his  Office. 

(Sec.  5148.)  Any  vacancy  in  the  board  shall  be  filled 
by  appointment  by  the  remaining  directors,  and  any 
director  so  appointed  shall  hold  his  place  until  the  next 
election. 

(Sec.  5149.)  If  from  any  cause  an  election  of  directors 
is  not  made  at  the  time  appointed,  the  association  shall 
not  for  that  cause  be  dissolved,  but  an  election  may  be 
held  on  any  subsequent  day,  thirty  days'  notice  thereof 
in  all  cases  having  been  given  in  a  newspaper  published 
in  the  city,  town  or  county  in  which  the  association  is  lo- 
cated; and  if  no  newspaper  is  published  in  such  city,  town 
or  county,  such  notice  shall  be  published  in  a  newspaper 
published  nearest  thereto.  If  the  articles  of  association 
do  not  fix  the  day  on  which  the  election  shall  be  held,  or 
if  no  election  is  held  on  the  day  fixed,  the  day  for  the 
election  shall  be  designated  by  the  board  of  directors  in 
their  by-laws,  or  otherwise;  or  if  the  directors  fail  to 
fix  the  day,  shareholders  representing  two-thirds  of  the 
shares  may  do  so. 

(Sec.  5150.)  One  of  the  directors,  to  be  chosen  by  the 
board,  shall  be  the  president  of  the  board. 

(Sec.  5151.)  The  shareholders  of  every  national  bank- 
ing association  shall  be  held  individually  responsible, 
equally  and  ratably,  and  not  one  for  another,  for  all  con- 


NATIONAL   BANKS   AND   BANK   CURRENCY. 


211 


tracts,  debts  and  engagements  of  such  association,  to  the 
extent  of  the  amount  of  their  stock  therein,  at  the  par 
value  thereof,  in  addition  to  the  amount  invested  in  such 
shares;  except  that  shareholders  of  any  banking  associa- 
tion now  existing  under  State  laws,  having  not  less  than 
five  millions  of  dollars  of  capital  actually  paid  in,  and  a 
surplus  of  twenty  per  centum  on  hand,  both  to  be  deter- 
mined by  the  Comptroller  of  the  Currency,  shall  be  liable 
only  to  the  amount  invested  in  their  shares;  and  such 
surplus  of  twenty  per  centum  shall  be  kept  undiminished, 
and  be  in  addition  to  the  surplus  provided  for  in  this 
Title ;  and  if  at  any  time  there  is  a  deficiency  in  such  sur- 
plus of  twenty  per  centum,  such  association  shall  not  pay 
any  dividends  to  its  shareholders  until  the  deficiency  is 
made  good;  and  in  case  of  such  deficiency  the  Comptroller 
of  the  Currency  may  compel  the  association  to  close  its 
business  and  wind  up  its  affairs  under  the  provisions  of 
chapter  four  of  this  Title. 

(Sec.  5152.)  Persons  holding  stock  as  executors,  ad- 
ministrators, guardians,  or  trustees,  shall  not  be  person- 
ally subject  to  any  liabilities  as  stockholders;  but  the 
estates  and  funds  in  their  hands  shall  be  liable  in  like 
manner  and  to  the  same  extent  as  the  testator,  intestate, 
ward,  or  person  interested  in  such  trust-funds  would  be, 
if  living  and  competent  to  act  and  hold  the  stock  in  his 
own  name. 

(Sec.  5153.)  All  national  banking  associations,  desig- 
nated for  that  purpose  by  the  Secretary  of  the  Treasury, 
shall  be  depositaries  of  public  money,  except  receipts 
from  customs,  under  such  regulations  as  may  be  pre- 
scribed by  the  Secretary;  and  they  may  also  be  employed 
as  financial  agents  of  the  government;  and  they  shall 
perform  all  such  reasonable  duties  as  depositaries  of 
public  moneys  and  financial  agents  of  the  government, 
as  may  be  required  of  them.  The  Secretary  of  the 
Treasury  shall  require  the  associations  thus  designated 
to  give  satisfactory  security,  by  the  deposit  of  United 
States  bonds  and  otherwise,  for  the  safe-keeping  and 
prompt  payment  of  the  public  money  deposited  with 
them,  and  for  the  faithful  performance  of  their  duties  as 
financial  agents  of  the  government.    And  every  associa- 


Exception 
as  to 

individual 
liability. 


Receiver 
may  be  ap- 
pointed for 
deficiency 
in  surplus. 

Executors, 
trustees, 
etc.,  not 
personally 
liable. 


Duties  and 
liabilities 
of  associa- 
tions when 
designated 
as  deposi- 
taries of 
public 
moneys. 


212 


HAND-BOOK    OF    FINANCE. 


Organiza- 
tion of 

State  banks 
as  national 
banking 
associa- 
tions. 


Mode  of 
procedure. 


To  bave  tbe 
same  rights 
liabilities, 
etc..  as 
other 
national 
associa- 
tions. 


Minimum 
capital. 


tion  so  designated  as  receiver  or  depositary  of  the  public 
money  shall  take  and  receive  at  par  all  of  the  national 
currency  bills,  by  whatever  association  issued,  which  have 
been  paid  into  the  government  for  internal  revenue,  or 
for  loans  or  stocks. 

(Sec.  5154.)  Any  bank  incorporated  by  special  law, 
or  any  banking  institution  organized  under  a  general  law 
of  any  State,  may  become  a  national  association  under 
this  Title  by  the  name  prescribed  in  its  organization  cer- 
tificate; and  in  such  case  the  articles  of  association  and 
the  organization  certificate  may  be  executed  by  a  majority 
of  the  directors  of  the  bank  or  banking  institution;  and 
the  certificate  shall  declare  that  the  owners  of  two-thirds 
of  the  capital  stock  have  authorized  the  directors  to  make 
such  certificate,  and  to  change  and  convert  the  bank  or 
banking  institution  into  a  national  association.  A  major- 
ity of  the  directors,  after  executing  the  articles  of  associ- 
ation and  organization  certificate,  shall  have  power  to 
execute  all  other  papers,  and  to  do  whatever  may  be  re- 
quired to  make  its  organization  perfect  and  complete  as 
a  national  association.  The  shares  of  any  such  bank  may 
continue  to  be  for  the  same  amount  each  as  they  were 
before  the  conversion,  and  the  directors  may  continue  to 
be  the  directors  of  the  association  until  others  are  elected 
or  appointed  in  accordance  with  the  provisions  of  this 
chapter;  and  any  State  bank  which  is  a  stockholder  in 
any  other  bank,  by  authority  of  State  laws,  may  continue 
to  hold  its  stock,  although  either  bank,  or  both,  may  be 
organized  under  and  have  accepted  the  provisions  of  this 
Title.  When  the  Comptroller  of  the  Currency  has  given 
to  such  association  a  certificate,  under  his  hand  and  official 
seal,  that  the  provisions  of  this  Title  have  been  complied 
with,  and  that  it  is  authorized  to  commence  the  business 
of  banking,  the  association  shall  have  the  same  powers 
and  privileges,  and  shall  be  subject  to  the  same  duties, 
responsibilities,  and  rules,  in  all  respects,  as  are  prescribed 
for  other  associations  originally  organized  as  national 
banking  associations,  and  shall  be  held  and  regarded  as 
such  an  association.  But  no  such  association  shall  have 
a  less  capital  than  the  amount  prescribed  for  associations 
organized  under  this  Title. 


NATIONAL    BAXKS    A^"D    BAM    CURRENCY. 


213 


(Sec.  5155.)  It  shall  be  lawful  for  any  bank  or  bank- 
ing- association,  organized  under  State  laws,  and  having 
branches,  the  capital  being  joint  and  assigned  to  and 
used  by  the  mother- bank  and  branches  in  definite  pro- 
portions, to  become  a  national  banking  association  in 
conformity  with  existing  laws,  and  to  retain  and  keep  in 
operation  its  branches,  or  such  one  or  more  of  them  as  it 
may  elect  to  retain;  the  amount  of  the  circulation  redeem- 
able at  the  mother-bank,  and  each  branch,  to  be  regulated 
by  the  amount  of  capital  assigned  to  and  used  by  each. 

(Sec.  5156.)  Nothing  in  this  Title  shall  affect  any  ap- 
pointments made,  acts  done,  or  proceedings  had  or  com- 
menced prior  to  the  third  day  of  June,  eighteen  hundred 
and  sixty-four,  in  or  toward  the  organization  of  any 
national  banking  association  under  the  act  of  February 
twenty-five,  eighteen  hundred  and  sixty-three;  but  all 
associations  which,  on  the  third  day  of  June,  eighteen 
hundred  and  sixty-four,  were  organized  or  commenced  to 
be  organized  under  that  act,  shall  enjoy  all  the  rights 
and  privileges  granted,  and  be  subject  to  all  the  duties, 
liabilities,  and  restrictions  imposed  by  this  Title,  notwith- 
standing all  the  steps  prescribed  by  this  Title  for  the 
organization  of  associations  were  not  pursued,  if  such 
associations  were  duly  organized  under  that  act. 

(Sec.  5185.)  Associations  may  be  organized  in  the 
manner  prescribed  by  this  Title  for  the  purpose  of  issuing 
notes  payable  in  gold;  and  upon  the  deposit  of  any 
United  States  bonds  bearing  interest  payable  in  gold 
with  the  Treasurer  of  the  United'  States,  in  the  manner 
prescribed  for  other  associations,  it  shall  be  lawful  for  the 
Comptroller  of  the  Currency  to  issue  to  the  association 
making  the  deposit  circulating  notes  of  different  denomi- 
nations, but  none  of  them  of  less  than  five  dollars,  and 
not  exceeding  in  amount  eighty  per  centum  of  the  par 
value  of  the  bonds  deposited,  which  shall  express  the 
promise  of  the  association  to  pay  them,  upon  presenta- 
tion at  the  office  at  which  they  are  issued,  in  gold  coin  of 
the  United  States,  and  shall  be  so  redeemable. 

(Sec.  5186.)  Every  association  organized  under  the 
preceding  section  shall  at  all  times  keep  on  hand  not 
less  than  twenty- five  per  centum  of  its  outstanding  cir- 


State  banks 

having 

branches. 


Reservation 
of  rights  of 
associa- 
tions 

organized 
under  act  of 
1863. 


Organiza- 
tion of  as- 
sociations 
for  issuing 
gold-notes. 


Denomina- 
tions of 
circulating 
notes,  and 
ratio  of  to 
bonds 
deposited. 


Reserve 
required  on 
circulation 
of  gold- 


214 


HA2ntD-B00K    OF    FINANCE. 


Gold-notes 
to  be 

received  at 
par  by  all 
gold-banks. 


"  Lawful 
money,'1 
how  con- 
strued for 
gold-banks. 


culation,  in  gold  or  silver  coin  of  the  United  States;  and 
shall  receive  at  par  in  the  payment  of  debts  the  gold- 
notes  of  every  other  such  association  which  at  the  time 
of  such  payment  is  redeeming  its  circulating  notes  in 
gold  coin  of  the  United  States,  and  shall  be  subject  to  all 
the  provisions  of  this  Title:  Provided,  That,  in  applying 
the  same  to  associations  organized  for  issuing  gold-notes, 
the  terms  "lawful  money"  and  "lawful  money  of  the 
United  States  ' '  shall  be  construed  to  mean  gold  or  silver 
coin  of  the  United  States. 


CHAPTER   II. 


What  asso- 
ciations are 
governed 
by  Chapters 
II,  III  and 
IV  of  this 
Title.* 


United 
States 
bonds 
defined. 

United 
States 
bonds  to  be 
deposited 
before  com- 
mencing 
business. 


Bonds  to  be 

increased 

upon 


OBTAINING   AND   ISSUING   CIRCULATING  NOTES. 

(Sec.  5157.)  The  provisions  of  chapters  two,  three 
and  four  *  of  this  Title,  which  are  expressed  without  re- 
strictive words,  as  applying  to  "national  banking  asso- 
ciations," or  to  "  associations,"  apply  to  all  associations 
organized  to  carry  on  the  business  of  banking  under  any 
act  of  Congress. 

(Sec.  5158.)  The  term  "  United  States  bonds,"  as 
used  throughout  this  chapter,  shall  be  construed  to  mean 
registered  bonds  of  the  United  States. 

(Sec.  5159.)  Every  association,  after  having  com- 
plied with  the  provisions  of  this  Title,  preliminary  to  the 
commencement  of  the  banking  business,  and  before  it 
shall  be  authorized  to  commence  banking  business  under 
this  Title,  shall  transfer  and  deliver  to  the  Treasurer  of 
the  United  States  any  United  States  registered  bonds, 
bearing  interest,  to  an  amount  not  less  than  thirty  thou- 
sand dollars  and  not  less  than  one  third  of  the  capital 
stock  paid  in.  Such  bonds  shall  be  received  by  the 
Treasurer  upon  deposit,  and  shall  be  by  him  safely  kept 
in  his  office,  until  they  shall  be  otherwise  disposed  of,  in 
pursuance  of  the  provisions  of  this  Title. 

(Sec.  5160.)  The  deposits  of  bonds  made  by  each 
association  shall  be  increased  as  its  capital  may  be  paid 


*  Chapters  II,  III  and  IV  of  this  compilation  and  of  the  Revised 
Statutes. 


NATIONAL   BANKS   AND  'BANK   CUBRENCY.  215 


up  or  increased,  so  that  every  association  shall  at  all 
times  have  on  deposit  with  the  Treasurer  registered 
United  States  bonds  to  the  amount  of  at  least  one  third 
of  its  capital  stock  actually  paid  in.  And  any  association 
that  may  desire  to  reduce  its  capital  or  to  close  up  its 
business  and  dissolve  its  organization,  may  take  up  its 
bonds  upon  returning  to  the  Comptroller  its  circulating 
notes  in  the  proportion  hereinafter  required,  or  may  take 
up  any  excess  of  bonds  beyond  one  third  of  its  capital 
stock,  and  upon  which  no  circulating  notes  have  been 
delivered. 

That  any  association  organized  under  this  act,  or  any 
of  the  acts  of  which  this  is  an  amendment,  desiring  to 
withdraw  its  circulating  notes,  in  whole  or  in  part,  may, 
upon  the  deposit  of  lawful  money  with  the  Treasurer  of 
the  United  States  in  sums  of  not  less  than  nine  thousand 
dollars,  take  up  the  bonds  which  said  association  has  on 
deposit  with  the  Treasurer  for  the  security  of  such  circu- 
lating notes,  which  bonds  shall  be  assigned  to  the  bank 
in  the  manner  specified  in  sections  5162  and  5163  of  the 
Revised  Statutes ;  and  the  outstanding  notes  of  said  asso- 
ciation, to  an  amount  equal  to  the  legal- tender  notes 
deposited,  shall  be  redeemed  at  the  Treasury  of  the 
United  States,  and  destroyed  as  now  provided  by  law: 
Provided;  that  the  amount  of  the  bonds  on  deposit  for 
circulation  shall  not  be  reduced  below  fifty  thousand  dol- 
lars. 

(Sec.  5161.)  To  facilitate  a  compliance  with  the  two 
preceding  sections,  the  Secretary  of  the  Treasury  is 
authorized  to  receive  from  any  association,  and  cancel, 
any  United  States  coupon  bonds,  and  to  issue  in  lieu 
thereof  registered  bonds  of  like  amount,  bearing  a  like 
rate  of  interest,  and  having  the  same  time  to  run. 

(Sec.  5162.)  All  transfers  of  United  States  bonds, 
made  by  any  association  under  the  provisions  of  this 
Title,  shall  be  made  to  the  Treasurer  of  the  United  States 
in  trust  for  the  association,  with  a  memorandum  written 
or  printed  on  each  bond,  and  signed  by  the  cashier,  or 
some  other  officer  of  the  association  making  the  deposit. 
A  receipt  shall  be  given  to  the  association  by  the  Comp- 
troller of  the  Currency,  or  by  a  clerk  appointed  by  him 


increase  of 
capital. 


May  be 
diminished 
upon 
reduction 
of  capital. 


June  20, 
1874. 

Provisions 
for  retiring 
circulation 
and  with- 
drawing 
bonds. 


Limit  of 
withdrawal 
of  bonds. 


Exchange 
of  coupon 
for  regis- 
tered 
bonds. 


Transfer  of 
bonds  to 

Treasurer. 


216 


HAND-BOOK    OF    FINANCE. 


Registry  of 
transfers. 


Notice  of 
transfer  to 
be  given  to 
association. 


Comp- 
troller to 
have  access 
to  bonds, 
and  to 
books  of 
Treasurer. 

Treasurer 
to  have 
access  to 
books  of 
Comp- 
troller. 


Annual  ex- 
amination 
of  bonds  by 
associa- 
tions. 


for  that  purpose,  stating  that  the  bond  is  held  in  trust 
for  the  association  on  whose  behalf  the  transfer  is  made, 
and  as  security  for  the  redemption  and  payment  of  any 
circulating  notes  that  have  been  or  may  be  delivered  to 
such  association.  No  assignment  or  transfer  of  any  such 
bond  by  the  Treasurer  shall  be  deemed  valid  unless  coun- 
tersigned by  the  Comptroller  of  the  Currency. 

(Sec.  5163.)  The  Comptroller  of  the  Currency  shall 
keep  in  his  office  a  book  in  which  he  shall  cause  to  be 
entered,  immediately  upon  countersigning  it,  every  trans- 
fer or  assignment  by  the  Treasurer,  of  any  bonds  belong- 
ing to  a  national  banking  association,  presented  for  his 
signature.  He  shall  state  in  such  entry  the  name  of  the 
association  from  whose  accounts  the  transfer  is  made,  the 
name  of  the  party  to  whom  it  is  made,  and  the  par  value 
of  the  bonds  transferred. 

(Sec.  5164.)  The  Comptroller  of  the  Currency  shall, 
immediately  upon  countersigning  and  entering  any  trans- 
fer or  assignment  by  the  Treasurer,  of  any  bonds  belong- 
ing to  a  national  banking  association,  advise  by  mail  the 
association  from  whose  accounts  the  transfer  is  made,  of 
the  kind  and  numerical  designation  of  the  bonds,  and  the 
amount  thereof  so  transferred. 

(Sec.  5165.)  The  Comptroller  of  the  Currency  shall 
have  at  all  times,  during  office  hours,  access  to  the  books 
of  the  Treasurer  of  the  United  States  for  the  purpose  of 
ascertaining  the  correctness  of  any  transfer  or  assignment 
of  the  bonds  deposited  by  an  association,  presented  to 
the  Comptroller  to  countersign;  and  the  Treasurer  shall 
have  the  like  access  to  the  book  mentioned  in  section 
fifty-one  hundred  and  sixty-three,  during  office  hours,  to 
ascertain  the  correctness  of  the  entries  in  the  same;  and 
the  Comptroller  shall  also  at  all  times  have  access  to  the 
bonds  on  deposit  with  the  Treasurer,  to  ascertain  their 
amount  and  condition. 

(Sec.  5166.)  Every  association  having  bonds  deposited 
in  the  office  of  the  Treasurer  of  the  United  States  shall, 
once  or  oftener  in  each  fiscal  year,  examine  and  compare 
the  bonds  pledged  by  the  association  with  the  books  of 
the  Comptroller  of  the  Currency  and  with  the  accounts  of 
the  association,  and,  if  they  are  found  correct,  to  execute 


NATIONAL    BANKS   AND    BANK    CURRENCY. 


217 


to  the  Treasurer  a  certificate  setting  forth  the  different 
kinds  and  the  amounts  thereof,  and  that  the  same  are  in 
the  possession  and  custody  of  the  Treasurer  at  the  date 
of  the  certificate.  Such  examination  shall  be  made  at 
such  time  or  times,  during  the  ordinary  business  hours, 
as  the  Treasurer  and  the  Comptroller,  respectively,  may 
select,  and  may  be  made  by  an  officer  or  agent  of  such 
association,  duly  appointed  in  writing  for  that  purpose; 
and  his  certificate  before  mentioned  shall  be  of  like  force 
and  validity  as  if  executed  by  the  president  or  cashier. 
A  duplicate  of  such  certificate,  signed  by  the  Treasurer, 
shall  be  retained  by  the  association. 

(Sec.  51G7.)  The  bonds  transferred  to  and  deposited 
with  the  Treasurer  of  the  United  States,  by  any  associa- 
tion, for  the  security  of  its  circulating  notes,  shall  be 
held  exclusively  for  that  purpose,  until  such  notes  are 
redeemed,  except  as  provided  in  this  Title.  The  Comp- 
troller of  the  Currency  shall  give  to  any  such  association 
powers  of  attorney  to  receive  and  appropriate  to  its  own 
use  the  interest  on  the  bonds  which  it  has  so  transferred 
to  the  Treasurer;  but  such  powers  shall  become  inopera- 
tive whenever  such  association  fails  to  redeem  its  circu- 
lating notes.  Whenever  the  market  or  cash  value  of  any 
bonds  thus  deposited  with  the  Treasurer  is  reduced  below 
the  amount  of  the  circulation  issued  for  the  same,  the 
Comptroller  may  demand  and  receive  the  amount  of  such 
depreciation  in  other  United  States  bonds  at  cash  value, 
or  in  money,  from  the  association,  to  be  deposited  with 
the  Treasurer  as  long  as  such  depreciation  continues. 
And  the  Comptroller,  upon  the  terms  prescribed  by  the 
Secretary  of  the  Treasury,  may  permit  an  exchange  to 
be  made  of  any  of  the  bonds  deposited  with  the  Treas- 
urer by  any  association,  for  other  bonds  of  the  United 
States  authorized  to  be  received  as  security  for  circulating 
notes,  if  he  is  of  opinion  that  such  an  exchange  can  be 
made  without  prejudice  to  the  United  States;  and  he  may 
direct  the  return  of  any  bonds  to  the  association  which 
transferred  the  same,  in  sums  of  not  less  than  one  thou- 
sand dollars,  upon  the  surrender  to  him  and  the  cancel- 
lation of  a  proportionate  amount  of  such  circulating 
notes:  Prodded,  That  the  remaining  bonds  which  shall 
10 


Bonds  to  be 
held  to 
secure 
circulation. 


Interest  on 
bonds,  how 
collected. 


If  bonds 
depreciate, 
deposit 
to  be 

increased. 


Exchange 
or  return 
of  bonds. 


218 


HAND-BOOK    OF    FINANCE. 


Delivery  of 
circulating 
notes  to  as- 
sociations. 


Ratio  to 
capital  of 
circulating 
notes 
issued. 


Form, 
denomina- 
tions and 
printing  of 
circulating 
notes. 


have  been  transferred  by  the  association  offering  to  sur- 
render circulating-  notes  are  equal  to  the  amount  required 
for  the  circulating  notes  not  surrendered  by  such  associa- 
tion, and  that  the  amount  of  bonds  in  the  hands  of  the 
Treasurer  is  not  diminished  below  the  amount  required 
to  be  kept  on  deposit  with  him,  and  that  there  has  been 
no  failure  by  the  association  to  redeem  its  circulating 
notes,  nor  any  other  violation  by  it  of  the  provisions  of 
this  Title,  and  that  the  market  or  cash  value  of  the 
remaining  bonds  is  not  below  the  amount  required  for 
the  circulation  issued  for  the  same. 

(Sec.  5171.)  Upon  a  deposit  of  bonds  as  prescribed  by 
sections  fifty-one  hundred  and  fifty-nine  and  fifty-one 
hundred  and  sixty,  the  association  making  the  same  shall 
be  entitled  to  receive  from  the  Comptroller  of  the  Cur- 
rency circulating  notes  of  different  denominations,  in 
blank,  registered  and  countersigned  as  hereinafter  pro- 
vided, equal  in  amount  to  ninety  per  centum  of  the  cur- 
rent market  value  of  the  United  States  bonds  so  trans- 
ferred and  delivered,  but  not  exceeding  ninety  per  centum 
of  the  amount  of  the  bonds  at  the  par  value  thereof,  if 
bearing  interest  at  a  rate  not  less  than  five  per  centum 
per  annum :  Provided,  That  the  amount  of  circulating 
notes  to  be  furnished  to  each  association  shall  be  in  pro- 
portion to  its  paid-up  capital,  as  follows,  and  no  more: 

First.  To  each  association  whose  capital  does  not 
exceed  five  hundred  thousand  dollars,  ninety  per  centum 
of  such  capital. 

Second.  To  each  association  whose  capital  exceeds 
five  hundred  thousand  dollars,  but  does  not  exceed  one 
million  of  dollars,  eighty  per  centum  of  such  capital. 

Third.  To  each  association  whose  capital  exceeds  one 
million  of  dollars,  but  does  not  exceed  three  million[s]  of 
dollars,  seventy-five  per  centum  of  such  capital. 

Fourth.  To  each  association  whose  capital  exceeds 
three  millions  of  dollars,  sixty  per  centum  of  such 
capital. 

(Sec.  5172.)  In  order  to  furnish  suitable  notes  for 
circulation,  the  Comptroller  of  the  Currency  shall,  under 
the  direction  of  the  Secretary  of  the  Treasury,  cause 
plates  and  dies  to  be  engraved,  in  the  best  manner  to 


NATIONAL   BANKS   AND   BANK   CURRENCY.  219 

guard  against  counterfeiting  and  fraudulent  alterations, 
and  shall  have  printed  therefrom,  and  numbered,  such 
quantity  of  circulating  notes,  hi  blank,  of  the  denomina- 
tions of  one  dollar,  two  dollars,  three  dollars,  five  dol- 
lars, ten  dollars,  twenty  dollars,  fifty  dollars,  one  hun- 
dred dollars,  five  hundred  dollars,  and  one  thousand 
dollars,  as  may  be  required  to  supply  the  associations 
entitled  to  receive  the  same.  Such  notes  shall  express 
upon  their  face  that  they  are  secured  by  United  States 
bonds,  deposited  with  the  Treasurer  of  the  United  States, 
by  the  written  or  engraved  signatures  of  the  Treasurer 
and  Register,  and  by  the  imprint  of  the  seal  of  the 
Treasury;  and  shall  also  express  upon  their  face  the 
promise  of  the  association  receiving  the  same  to  pay  on 
demand,  attested  by  the  signatures  of  the  president  or 
vice-president  and  cashier;  and  shall  bear  such  devices 
and  such  other  statements,  and  shall  be  in  such  form,  as 
the  Secretary  of  the  Treasury  shall,  by  regulation,  direct. 

That  the  Comptroller  of  the  Currency  shall,  under   June  20, 
such  rules  and  regulations  as  the  Secretary  of  the  Treas-    The' charter 
ury  may  prescribe,  cause  the  charter  numbers  of  the   numbers  of 
association  to  be  printed  upon  all  national-bank  notes   printed 
which  may  be  hereafter  issued  by  him.  Stes.^1 

(Sec.  5173.)  The  plates  and  special  dies  to  be  pro-    Control  of 

cured  by  the  Comptroller  of  the  Currency  for  the  printing   diesf  and* 

of  such  circulating  notes  shall  remain  under  his  control   expenses  of 

...       bureau, 
and  direction,  and  the  expenses  necessarily  incurred  in 

executing  the  laws  respecting  the  procuring  of  such 

notes,   and  all  other  expenses  of  the  Bureau  of  the 

Currency,  shall  be  paid  out  of  the  proceeds  of  the  taxes 

or  duties  assessed  and  collected  on  the  circulation  of 

national  banking  associations  under  this  Title. 

(Sec.  5174.)  The  Comptroller  of  the  Currency  shall   Annual 

cause  to  be  examined,  each  year,  the  plates,  dies,  but-    §ono?a" 

pieces  [bed-pieces],  and  other  material  from  which  the   Pj^es,  dies, 

national-bank  circulation  is  printed,  in  whole  or  in  part, 

and  file  in  his  office  annually  a  correct  list  of  the  same. 

Such  material  as  shall  have  been  used  in  the  printing  of    Certain 

the  notes  of  associations  which  are  in   liquidation,  or   material 

have  closed  business,   shall  be  destroyed  under    such   to  be 

destroyed 
regulations  as  shall  be  prescribed  by  the  Comptroller  of 


220 


HA^D-BOOK    OF    FINANCE. 


Issue  of 
notes  under 
five  dollars, 
limited. 


Circulation 
of  certain 
banks 
limited  to 
§500,000. 

June  20, 
1874. 

Repeal 
of  limita- 
tion of 
age:  legate 
amount  of 
circulating 
notes. 


Redemp- 
tion of 
legal-tender 
notes  in 
proportion 
to  the  issue 
of  national- 
bank  notes. 


Legal  - 
tenders  not 
to  be 
reduced 
below 
§300,000,000. 


Maximum 
amount  of 
U.  S.  notes 
outstand- 
ing. 


the  Currency  and  approved  by  the  Secretary  of  the 
Treasury.  The  expenses  of  any  such  examination  or 
destruction  shall  be  paid  out  of  any  appropriation  made 
by  Congress  for  the  special  examination  of  national 
banks  and  bank-note  plates. 

(Sec.  5175.)  Not  more  than  one-sixth  part  of  the 
notes  furnished  to  any  association  shall  be  of  a  less 
denomination  than  five  dollars.  After  specie  payments 
are  resumed  no  association  shall  be  furnished  with  notes 
of  a  less  denomination  than  five  dollars. 

(Sec.  5176.)  No  banking  association  organized  sub- 
sequent to  the  twelfth  day  of  July,  eighteen  hundred 
and  seventy,  shall  have  a  circulation  in  excess  of  five 
hundred  thousand  dollars. 

*  That  section  five  thousand  one  hundred  and  seventy- 
seven  of  the  Revised  Statutes,  limiting  the  aggregate 
amount  of  circulating  notes  of  national  banking  associa- 
tions, be  and  is  hereby  repealed ;  and  each  existing 
banking  association  may  increase  its  circulating  notes  in 
accordance  with  existing  law  without  respect  to  said 
aggregate  limit;  and  new  banking  associations  may  be 
organized  in  accordance  with  existing  law  without 
respect  to  said  aggregate  limit.  And  whenever,  and  so 
often,  as  circulating  notes  shall  be  issued  to  any  such 
banking  association,  so  increasing  its  capital  or  circulat- 
ing notes,  or  so  newly  organized  as  aforesaid,  it  shall  be 
the  duty  of  the  Secretary  of  the  Treasury  to  redeem  the 
legal-tender  United  States  notes  in  excess  only  of  three 
hundred  million  of  dollars,  to  the  amount  of  eighty  per 
centum  of  the  sum  of  national-bank  notes  so  issued  to 
any  such  banking  association  as  aforesaid,  and  to  con- 
tinue such  redemption  as  such  circulating  notes  are 
issued  until  there  shall  be  outstanding  the  sum  of  three 
hundred  million  dollars  of  such  legal-tender  United 
States  notes,  and  no  more. 

That  the  amount  of  United  States  notes  outstanding 
and  to  be  used  as  a  part  of  the  circulating  medium  shall 
not  exceed  the  sum  of  three  hundred  and  eighty-two 
million   dollars,  which  said   sum  shall  appear  in  each 


*  Sections  5177,  5178,  5179,  5180  and  5181,  repealed  by  act  of  June 
20,  1874. 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


221 


monthly  statement  of  the  public  debt,  and  no  part 
thereof  shall  be  held  or  used  as  a  reserve. 

(Sec.  5182.)  After  any  association  receiving  circu- 
lating notes  under  this  Title  has  caused  its  promise  to 
pay  such  notes  on  demand  to  be  signed  by  the  president 
or  vice-president  and  cashier  thereof,  in  such  manner  as 
to  make  them  obligatory  promissory  notes,  payable  on 
demand,  at  its  place  of  business,  such  association  may 
issue  and  circulate  the  same  as  money.  And  the  same 
shall  be  received  at  par  in  all  parts  of  the  United  States 
in  payment  of  taxes,  excises,  public  lands,  and  all  other 
dues  to  the  United  States,  except  duties  on  imports;  and 
also  for  all  salaries  and  other  debts  and  demands  owing 
by  the  United  States  to  individuals,  corporations  and 
associations  within  the  United  States,  except  interest  on 
the  public  debt,  and  in  redemption  of  the  national  cur- 
rency. 

(Sec.  5183.)  No  national  banking  association  shall 
issue  post-notes  or  any  other  notes  to  circulate  as  money 
than  such  as  are  authorized  by  the  provisions  of  this 
Title. 

(Sec.  5184.)  It  shall  be  the  duty  of  the  Comptroller  of 
the  Currency  to  receive  worn-out  or  mutilated  circulating 
notes  issued  by  any  banking  association,  and  also,  on  due 
proof  of  the  destruction  of  any  such  circulating  notes,  to 
deliver  in  place  thereof  to  the  association  other  blank 
circulating  notes  to  an  equal  amount.  Such  worn-out  or 
mutilated  notes,  after  a  memorandum  has  been  entered 
in  the  proper  books,  in  accordance  with  such  regulations 
as  may  be  established  by  the  Comptroller,  as  well  as  all 
circulating  notes  which  shall  have  been  paid  or  surren- 
dered to  be  canceled,  shall  be  destroyed  by  maceration 
instead  of  burning  to  ashes  in  presence  of  four  persons, 
one  to  be  appointed  by  the  Secretary  of  the  Treasury, 
one  by  the  Comptroller  of  the  Currency,  one  by  the 
Treasurer  of  the  United  States,  and  one  by  the  associ- 
ation, under  such  regulations  as  the  Secretary  of  the 
Treasury  may  prescribe.  A  certificate  of  such  maceration, 
signed  by  the  parties  so  appointed,  shall  be  made  in  the 
books  of  the  Comptroller,  and  a  duplicate  thereof  for- 
warded to  the  association  whose  notes  are  thus  canceled. 


Circulating 
notes,  when 
may  be 
issued. 


For  what 
demands 
shall  be 
received. 


Issue  of 
other  notes 
prohibited. 
Act  of  Feb. 
18,  1875, 
correcting 
Rev.  Stat. 
Merchants' 
Bank  vs. 
State  Bank, 
10  Wall.  604. 


Destroying 
and 

replacing 
worn-out 
and  muti- 
lated notes. 


Act  of  June 
23,  1874. 


222 


HAND-BOOK   OF   FINANCE. 


CHAPTER  III. 


REGULATION   OF   THE   BANKING    BUSINESS. 


Place  of 
business. 
Merchants' 
Bank  vs. 
State  Bank, 
10  Wall.  604. 
Require- 
ments as  to 
lawful 
money 
reserve. 


Act  June 
20, 1874. 


No  loans  or 
dividends 
to  be  made 
while 
reserve  is 
below  limit. 


Receiver 
may  be 
appointed 
for  failure 
to  make, 
good  the 
reserve. 


(Sec.  5190.)  The  usual  business  of  each  national 
banking  association  shall  be  transacted  at  an  office  or 
banking-house  located  in  the  place  specified  in  its  organ- 
ization certificate. 

(Sec.  5191.)  Every  national  banking  association  in 
either  of  the  following  cities:  Albany,  Baltimore,  Bos- 
ton, Cincinnati,  Chicago.  Cleveland,  Detroit,  Louisville, 
Milwaukee,  New  Orleans,  New  York,  Philadelphia, 
Pittsburgh,  Saint  Louis,  San  Francisco  and  Washington, 
shall  at  all  times  have  on  hand,  in  lawful  money  of  the 
United  States,  an  amount  equal  to  at  least  twenty-five 
per  centum  of  the  aggregate  amount  of  its  deposits ;  and 
every  other  association  shall  at  all  times  have  on  hand, 
in  lawful  money  of  the  United  States,  an  amount  equal 
to  at  least  fifteen  per  centum  of  the  aggregate  amount  of 
its  deposits.  Whenever  the  lawful  money  of  any  associ- 
ation in  any  of  the  cities  named  shall  be  below  the 
amount  of  twenty-five  per  centum  of  its  deposits,  and 
whenever  the  lawful  money  of  any  other  association 
shall  be  below  fifteen  per  centum  of  its  deposits,  such 
association  shall  not  increase  its  liabilities  by  making 
any  new  loans  or  discounts  otherwise  than  by  discounting 
or  purchasing  bills  of  exchange  payable  at  sight,  nor 
make  any  dividend  of  its  profits  until  the  required  pro- 
portion, between  the  aggregate  amount  of  its  deposits 
and  its  lawful  money  of  the  United  States,  has  been 
restored.  And  the  Comptroller  of  the  Currency  may 
notify  any  association,  whose  lawful-money  reserve  shall 
be  below  the  amount  above  required  to  be  kept  on  hand, 
to  make  good  such  reserve ;  and  if  such  association  shall 
fail  for  thirty  days  thereafter  so  to  make  good  its  reserve 
of  lawful  money,  the  Comptroller  may,  with  the  concur- 
rence of  the  Secretary  of  the  Treasury,  appoint  a  receiver 
to  wind  up  the  business  of  the  association,  as  provided  in 
section  fifty-two  hundred  and  thirty-four. 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


223 


That  every  association  organized,  or  to  be  organized, 
under  the  provisions  of  the  said  act,  and  of  the  several 
acts  amendatory  thereof,  shall  at  all  times  keep  and  have 
on  deposit  in  the  Treasury  of  the  United  States,  in  lawful 
money  of  the  United  States,  a  sum  equal  to  five  per 
centum  of  its  circulation,  to  be  held  and  used  for  the 
redemption  of  such  circulation;  which  sum  shall  be 
counted  as  a  part  of  its  lawful  reserve,  as  provided  in 
section  two  of  this  act  (Sec.  5191  Revised  Statutes);  and 
when  the  circulating  notes  of  any  such  associations,  as- 
sorted or  unassorted,  shall  be  presented  for  redemption, 
in  sums  of  one  thousand  dollars  or  any  multiple  thereof, 
to  the  Treasurer  of  the  United  States,  the  same  shall  be 
redeemed  in  United  States  notes.  All  notes  so  redeemed 
shall  be  charged  by  the  Treasurer  of  the  United  States  to 
the  respective  associations  issuing  the  same,  and  he  shall 
notify  them  severally,  on  the  first  day  of  each  month,  or 
oftener,  at  his  discretion,  of  the  amount  of  such  redemp- 
tions; and  whenever  such  redemptions  for  any  associa- 
tion shall  amount  to  the  sum  of  five  hundred  dollars,  such 
association  so  notified  shall  forthwith  deposit  with  the 
Treasurer  of  the  United  States  a  sum  in  United  States 
notes  equal  to  the  amount  of  its  circulating  notes  so 
redeemed.  And  all  notes  of  national  banks,  worn,  de- 
faced, mutilated,  or  otherwise  unfit  for  circulation,  shall, 
when  received  by  any  assistant  treasurer  or  at  any  desig- 
nated depository  of  the  United  States,  be  forwarded  to 
the  Treasurer  of  the  United  States  for  redemption  as 
provided  herein.  And  when  such  redemptions  have  been 
so  reimbursed,  the  circulating  notes  so  redeemed  shall  be 
forwarded  to  the  respective  associations  by  which  they 
were  issued;  but  if  any  of  such  notes  are  worn,  muti- 
lated, defaced,  or  rendered  otherwise  unfit  for  use,  they 
shall  be  forwarded  to  the  Comptroller  of  the  Currency 
and  destroyed,  and  replaced  as  now  provided  by  law: 
Provided,  That  each  of  said  associations  shall  reimburse 
to  the  Treasury  the  charges  for  transportation,  and  the 
costs  for  assorting  such  notes;  and  the  associations  here- 
after organized  shall  also  severally  reimburse  to  the 
Treasury  the  cost  of  engraving  such  plates  as  shall  be 
ordered  by  each  association  respectively ;  and  the  amount 


June  20, 
1874. 

Redemp- 
tion fund 
to  be 
deposited 
with 
Treasurer. 


May  be 
counted  as 
lawful 
reserve. 

Provisions 
relative  to 
redemption 
of  notes  by 
Treasurer. 


Mutilated 
notes  to  be 
returned  by 
assistant 
treasurers. 


Associa- 
tions to  re- 
imburse the 
Treasury 
for  cost  of 
redemp- 
tion, new 
plates,  etc. 


224 


HAND-BOOK    OF    FINANCE. 


Redemp- 
tion cities 
and  propor- 
tion of 
reserve 
which  may 
be  kept 
therein. 
See  act  of 
June  20, 
1874. 


Clearing- 
house 
certificates 
deemed 
lawful 
money. 


U.  S.  certifi- 
cates of 
deposit  may 
he  issued, 
and  may 
count  as 
reserve. 


Limitation 
upon  the 
issue  of 
certificates 
of  deposit. 


assessed  upon  each  association  shall  be  in  proportion  to 
the  circulation  redeemed,  and  be  charged  to  the  fund  on 
deposit  with  the  Treasurer. 

(Sec.  5192.)  Three-fifths  of  the  reserve  of  fifteen  per 
centum  required  by  the  preceding  section  to  be  kept,  may- 
consist  of  balances  due  to  an  association,  available  for 
the  redemption  of  its  circulating  notes,  from  associations 
approved  by  the  Comptroller  of  the  Currency,  organized 
under  the  act  of  June  three,  eighteen  hundred  and  sixty- 
four,  or  under  this  Title,  and  doing  business  in  the  cities 
of  Albany,  Baltimore,  Boston,  Charleston,  Chicago,  Cin- 
cinnati, Cleveland,  Detroit,  Louisville,  Milwaukee,  New 
Orleans,  New  York,  Philadelphia,  Pittsburgh,  Rich- 
mond, Saint  Louis,  San  Francisco  and  Washington. 
Clearing-house  certificates,  representing  specie  or  lawful 
money  specially  deposited  for  the  purpose,  of  any  clear- 
ing-house association,  shall  also  be  deemed  to  be  lawful 
money  in  the  possession  of  any  association  belonging  to 
such  clearing-house,  holding  and  owning  such  certificate, 
within  the  preceding  section. 

(Sec.  5193.)  The  Secretary  of  the  Treasury  may  re- 
ceive United  States  notes  on  deposit,  without  interest, 
from  any  national  banking  associations,  in  sums  of  not 
less  than  ten  thousand  dollars,  and  issue  certificates 
therefor  in  such  form  as  he  may  prescribe,  in  denomina- 
tions of  not  less  than  five  thousand  dollars,  and  payable 
on  demand  in  United  States  notes  at  the  place  where  the 
deposits  were  made.  The  notes  so  deposited  shall  not 
be  counted  as  part  of  the  lawful-money  reserve  of  the 
association;  but  the  certificates  issued  therefor  may  be 
counted  as  part  of  its  lawful-money  reserve,  and  may 
be  accepted  in  the  settlement  of  clearing-house  balances 
at  the  places  where  the  deposits  therefor  were  made. 

(Sec  5194.)  The  power  conferred  on  the  Secretary  of 
the  Treasury,  by  the  preceding  section,  shall  not  be  exer- 
cised so  as  to  create  any  expansion  or  contraction  of  the 
currency.  And  United  States  notes  for  which  certificates 
are  issued  under  that  section,  or  other  United  States 
notes  of  like  amount,  shall  be  held  as  special  deposits  in 
the  Treasury,  and  used  only  for  the  redemption  of  such 
certificates. 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


225 


(Sec.  5195.)  Each  association  organized  in  any  of  the 
cities  named  in  section  fifty-one  hundred  and  ninety-one 
may  keep  one-half  of  its  lawful-money  reserve  in  cash 
deposits  in  the  city  of  New  York.  But  the  foregoing- 
provision  shall  not  apply  to  associations  organized  and 
located  in  the  city  of  San  Francisco  for  the  purpose  of 
issuing  notes  payable  in  gold.  Each  association  not 
organized  within  the  cities  named,  shall  select,  subject 
to  the  approval  of  the  Comptroller,  an  association  in 
either  of  the  cities  named,  at  which  it  will  redeem  its 
circulating  notes  at  par.  The  Comptroller  shall  give 
public  notice  of  the  names  of  the  associations  selected, 
at  which  redemptions  are  to  be  made  by  the  respective 
associations,  and  of  any  change  that  may  be  made  of 
the  association  at  which  the  notes  of  any  association  are 
redeemed.  Whenever  any  association  fails  either  to 
make  the  selection  or  to  redeem  its  notes  as  aforesaid, 
the  Comptroller  of  the  Currency  may,  upon  receiving 
satisfactory  evidence  thereof,  appoint  a  receiver  in  the 
manner  provided  for  in  section  fifty-two  hundred  and 
thirty-four,  to  wind  up  its  affairs.  But  this  section  shall 
not  relieve  any  association  from  its.  liability  to  redeem  its 
circulating  notes  at  its  own  counter,  at  par,  in  lawful 
money  on  demand. 

(Sec.  5196.)  Every  national  banking  association  formed 
or  existing  under  this  Title,  shall  take  and  receive  at  par, 
for  any  debt  or  liability  to  it,  any  and  all  notes  or  bills 
issued  by  any  lawfully  organized  national  banking  asso- 
ciation. But  this  provision  shall  not  apply  to  any  asso- 
ciation organized  for  the  purpose  of  issuing  notes  payable 
in  gold. 

(Sec.  5197.)  Any  association  may  take,  receive,  re- 
serve, and  charge  on  any  loan  or  discount  made,  or  upon 
any  note,  bill  of  exchange,  or  other  evidences  of  debt, 
interest  at  the  rate  allowed  by  the  laws  of  the  State, 
Territory,  or  district  where  the  bank  is  located,  and  no 
more,  except  that  where  by  the  laws  of  any  State  a 
different  rate  is  limited  for  banks  of  issue  organized 
under  State  laws,*  the  rate  so  limited  shall  be  allowed  for 
associations  organized  or  existing  in  any  such  State  under 
*  See  table  of  Interest  Laws  of  the  States,  page  254. 


Agents  for 
redemption 
of  circulat- 
ing notes 
to  be 

designated. 
See  act  of 
June  20, 
1874. 


Receiver 
may  be 
appointed 
for  failure 
to  redeem 
notes. 


National 

banks  to 

receive 

notes  of  all 

other 

national 

banks. 


Limitations 
upon  rate 
of  interest 
which  may 
be  taken. 
Tiffany  vs. 
National 
Bank  of 
Missouri.  18 
Wall.  409. 


226 


HAND-BOOK    OF    FINANCE. 


The  pur- 
chase or 
discount  of 
bills  of 
exchange 
not  usury. 


Penalty  for 
taking 
usurious 
interest. 


In  what 
courts  suits 
may  he 
brought. 

See  act  of 
Feb.  18, 
1875, 

correcting 
Rev.  Stat. 


Dividends 
and  surplus 
fund. 


Limit  of 
liabilities 


this  Title.  When  no  rate  is  fixed  by  the  laws  of  the 
State,  or  Territory,  or  district,  the  bank  may  take, 
receive,  reserve,  or  charge  a  rate  not  exceeding  seven  per 
centum,  and  such  interest  may  be  taken  in  advance, 
reckoning  the  days  for  which  the  note,  bill,  or  other 
evidence  of  debt  has  to  run.  And  the  purchase,  dis- 
count, or  sale  of  a  bona-fide  bill  of  exchange,  pa}7able  at 
another  place  than  the  place  of  such  purchase,  discount, 
or  sale,  at  not  more  than  the  current  rate  of  exchange 
for  sight  drafts  in  addition  to  the  interest,  shall  not  be 
considered  as  taking  or  receiving  a  greater  rate  of 
interest. 

(Sec.  5198.)  The  taking,  receiving,  reserving,  or 
charging  a  rate  of  interest  greater  than  is  allowed  by 
the  preceding  section,  when  knowingly  done,  shall  be 
deemed  a  forfeiture  of  the  entire  interest  which  the  note, 
bill,  or  other  evidence  of  debt  carries  with  it,  or  which 
has  been  agreed  to  be  paid  thereon.  In  case  the  greater 
rate  of  interest  has  been  paid,  the  person  by  whom  it 
has  been  paid,  or  his  legal  representatives,  may  recover 
back,  in  an  action  in  the  nature  of  an  action  of  debt, 
twice  the  amount  of  the  interest  thus  paid  from  the 
association  taking  or  receiving  the  same;  provided  such 
action  is  commenced  within  two  years  from  the  time  the 
usurious  transaction  occurred. 

Suits,  actions  and  proceedings  against  any  associa- 
tion under  this  Title  may  be  had  in  any  circuit,  district,  or 
territorial  court  of  the  United  States  held  within  the 
district  in  which  such  association  may  be  established, 
or  in  any  State,  county,  or  municipal  court  in  the  county 
or  city  in  which  said  association  is  located,  having  juris- 
diction in  similar  cases. 

(Sec.  5199.)  The  directors  of  any  association  may, 
semi-annually,  declare  a  dividend  of  so  much  of  the  net 
profits  of  the  association  as  they  shall  judge  expedient; 
but  each  association  shall,  before  the  declaration  of  a 
dividend,  carry  one-tenth  part  of  its  net  profits  of  the 
preceding  half-year  to  its  surplus  fund  until  the  same 
shall  amount  to  twenty  per  centum  of  its  capital  stock. 

(Sec.  5200.)  The  total  liabilities  to  any  association, 
of  any  person,  or  of  any  company,  corporation,  or  firm, 


NATIONAL   BANKS   AND   BANK   CURRENCY. 


227 


for  money  borrowed,  including,  in  the  liabilities  of  a 
company  or  firm,  the  liabilities  of  the  several  members 
thereof,  shall  at  no  time  exceed  one-tenth  part  of  the 
amount  of  the  capital  stock  of  such  association  actually 
paid  in.  But  the  discount  of  bills  of  exchange  drawn  in 
good  faith  against  actually  existing  values,  and  the  dis- 
count of  commercial  or  business  paper  actually  owned 
by  the  person  negotiating  the  same,  shall  not  be  con- 
sidered as  money  borrowed. 

(Sec.  5201.)  No  association  shall  make  any  loan  or 
discount  on  the  security  of  the  shares  of  its  own  capital 
stock,  nor  be  the  purchaser  or  holder  of  any  such  shares, 
unless  such  security  or  purchase  shall  be  necessEiry  to 
prevent  loss  upon  a  debt  previously  contracted  in  good 
faith;  and  stock  so  purchased  or  acquired  shall,  within 
six  months  from  the  time  of  its  purchase,  be  sold  or  dis- 
posed of  at  public  or  private  sale;  or,  in  default  thereof, 
a  receiver  may  be  appointed  to  close  up  the  business  of 
the  association,  according  to  section  fifty-two  hundred 
and  thirty-four. 

(Sec.  5202.)  No  association  shall  at  any  time  be 
indebted,  or  in  any  way  liable,  to  an  amount  exceeding 
the  amount  of  its  capital  stock  at  such  time  actually  paid 
in  and  remaining  undiminished  by  losses  or  otherwise, 
except  on  account  of  demands  of  the  nature  following : 

First.   Notes  of  circulation. 

Second.  Moneys  deposited  with  or  collected  by  the 
association. 

Third.  Bills  of  exchange  or  drafts  drawn  against 
money  actually  on  deposit  to  the  credit  of  the  associa- 
tion, or  due  thereto. 

Fourth.  Liabilities  to  the  stockholders  of  the  associa- 
tion for  dividends  and  reserve  profits. 

(Sec.  5203.)  No  association  shall,  either  directly  or 
indirectly,  pledge  or  hypothecate  any  of  its  notes  of 
circulation,  for  the  purpose  of  procuring  money  to  be 
paid  in  on  its  capital  stock,  or  to  be  used  in  its  banking 
operations,  or  otherwise;  nor  shall  any  association  use 
its  circulating  notes,  or  any  part  thereof,  in  any  manner 
or  form,  to  create  or  increase  its  capital  stock. 


to  an 

association 
of  any 
person, 
firm,  or 
corporation. 
The 

discount 
of  bills  of 
exchange, 
etc.,  not  a 
loan. 


Associa- 
tions not  to 
loan  upon 
or  purchase 
their  own 
stock. 
Bank  vs. 
Lanier,  11 
Wall.  369; 
Ballard  vs. 
Bank,  18 
Wall.  589. 

Receiver 
may  be 
appointed 
for  failure 
tosell  stock. 
Limit  of 
indebted- 
ness of 
association. 


Exceptions. 


Circulating 
notes  not  to 
be  hypothe- 
cated, nor 

used  ro 

increase 

capital. 


228 


HAND-BOOK    OF    FINANCE. 


Withdrawal 
of  capital 
prohibited. 


Dividend 
not  to 
exceed  net 
profits. 


Bad  debts 
defined. 


Enforcing 
payment  of 
deficiency 
in  capital 
stock. 


Receiver 
may  be  ap- 
pointed for 
failure  to 
pay  up 
capital. 


June  30, 
1876. 


(Sec.  5204.)  No  association,  or  any  member  thereof, 
shall,  during  the  time  it  shall  continue  its  banking 
operations,  withdraw,  or  permit  to  be  withdrawn,  either 
in  the  form  of  dividends  or  otherwise,  any  portion  of  its 
capital.  If  losses  have  at  any  time  been  sustained  by 
any  such  association,  equal  to  or  exceeding  its  undivided 
profits  then  on  hand,  no  dividend  shall  be  made;  and  no 
dividend  shall  ever  be  made  by  any  association,  while  it 
continues  its  banking  operations,  to  an  amount  greater 
than  its  net  profits  then  on  hand,  deducting  therefrom 
its  losses  and  bad  debts.  All  debts  due  to  any  associa- 
tions, on  which  interest  is  past  due  and  unpaid  for  a 
period  of  six  months,  unless  the  same  are  well  secured, 
and  in  process  of  collection,  shall  be  considered  bad 
debts  within  the  meaning  of  this  section.  But  nothing 
in  this  section  shall  prevent  the  reduction  of  the  capital 
stock  of  the  association  under  section  fifty-one  hundred 
and  forty-three. 

(Sec.  5205).  Every  association  which  shall  have  failed 
to  pay  up  its  capital  stock,  as  required  by  law,  and  every 
association  whose  capital  stock  shall  have  become  im- 
paired by  losses  or  otherwise,  shall,  within  three  months 
after  receiving  notice  thereof  from  the  Comptroller  of 
the  Currency,  pay  the  deficiency  in  the  capital  stock,  by 
assessment  upon  the  shareholders  pro  rata  for  the 
amount  of  capital  stock  held  by  each ;  and  the  Treasurer 
of  the  United  States  shall  withhold  the  interest  upon  all 
bonds  held  by  him  in  trust  for  any  such  association,  upon 
notification  from  the  Comptroller  of  the  Currency,  until 
otherwise  notified  by  him.  If  any  such  association  shall 
fail  to  pay  up  its  capital  stock,  and  shall  refuse  to  go 
into  liquidation,  as  provided  by  law,  for  three  months 
after  receiving  notice  from  the  Comptroller,  a  receiver 
may  be  appointed  to  close  up  the  business  of  the  associ- 
ation, according  to  the  provisions  of  section  fifty-two 
hundred  and  thirty-four. 

And  provided,  that  if  any  shareholder  or  shareholders 
of  such  bank  shall  neglect  or  refuse,  after  three  months' 
notice  to  pay  the  assessment,  as  provided  in  this  section, 
it  shall  be  the  duty  of  the  board  of  directors  to  cause  a 
sufficient  amount  of  the  capital  stock  of  such  shareholder 


NATIONAL    BANKS    AND    BANK    CURRENCY.  229 


or  shareholders  to  be  sold  at  public  auction  (after  thirty- 
days'  notice  shall  be  given  by  posting  such  notice  of  sale 
in  the  office  of  the  bank,  and  by  publishing  such  notice 
in  a  newspaper  of  the  city  or  town  in  which  the  bank  is 
located,  or  in  a  newspaper  published  nearest  thereto)  to 
make  good  the  deficiency;  and  the  balance,  if  any,  shall 
be  returned  to  such  delinquent  shareholder  or  share- 
holders. 

That  all  United  States  officers  charged  with  the  re- 
ceipt or  disbursement  of  public  moneys,  and  all  officers 
of  national  banks,  shall  stamp  or  write  in  plain  letters 
the  word  ' '  counterfeit, ' '  "altered ' '  or  "  worthless , ' ' 
upon  all  fraudulent  notes  issued  in  the  form  of,  and  in- 
tended to  circulate  as  money,  which  shall  be  presented 
at  their  places  of  business;  and  if  such  officers  shall 
wrongfully  stamp  any  genuine  note  of  the  United  States, 
or  of  the  national  banks,  they  shall,  upon  presentation, 
redeem  such  notes  at  the  face  value  thereof. 

Sec.  6.  That  all  savings  banks  or  savings  and  trust 
companies  organized  under  authority  of  any  act  of  Con- 
gress shall  be,  and  are  hereby,  required  to  make,  to  the 
Comptroller  of  the  Currency,  and  publish,  all  the  reports 
which  national  banking  associations  are  required  to 
make  and  publish  under  the  provisions  of  sections  fifty- 
two  hundred  and  eleven,  fifty-two  hundred  and  twelve 
and  fifty-two  hundred  and  thirteen  of  the  Revised  Stat- 
utes, and  shall  be  subject  to  the  same  penalties  for 
failure  to  make  or  publish  such  reports  as  are  therein 
provided;  which  penalties  may  be  collected  by  suit  be- 
fore any  court  of  the  United  States  in  the  district  in 
which  said  savings  banks  or  savings  and  trust  companies 
may  be  located.  And  all  savings  or  other  banks  now 
organized,  or  which  shall  hereafter  be  organized,  in  the 
District  of  Columbia,  under  any  act  of  Congress,  which 
shall  have  capital  stock  paid  up  in  whole  or  in  part, 
shall  be  subject  to  all  the  provisions  of  the  Revised  Stat- 
utes, and  of  all  acts  of  Congress  applicable  to  national 
banking  associations,  so  far  as  the  same  may  be  appli- 
cable to  such  savings  or  other  banks:  Provided,  that 
such  savings  banks  now  established  shall  not  be  required 


Bank 
officers 
to  stamp 
counterfeit 
and  altered 
notes. 


Act  June  30, 
1876. 
Savings 
Banks  and 
Trust  Co' s 
to  make 
reports  to 
the  Comp- 
troller 
of  the 
Currency. 


230 


HAND-BOOK    OF    FINANCE. 


Associ- 
ations not 
to  pay  out 
uu  current 
notes. 


Penalty  for 
falsely 
certifying 
checks. 


Receiver 
may  be 
appointed 
for  false 
certifica- 
tion. 


List  of 
share- 
holders to 
be  kept, 
subject  to 
inspection. 


List  to  be 
sent  to 
Comp- 
troller 
annually. 


to  have  a  paid  in  capital  exceeding  one  hundred  thou- 
sand dollars. 

(Sec.  5206.)  No  association  shall  at  any  time  pay  out 
on  loans  or  discounts,  or  in  purchasing  drafts  or  bills  of 
exchange,  or  in  payment  of  deposits,  or  in  any  other 
mode  pay  or  put  in  circulation,  the  notes  of  any  bank  or 
banking  association  which  are  not,  at  any  such  time,  re- 
ceivable, at  par,  on  deposit,  and  in  payment  of  debts  by 
the  association  so  paying  out  or  circulating  such  notes; 
nor  shall  any  association  knowingly  pay  out  or  put  in 
circulation  any  notes  issued  by  any  bank  or  banking 
association  which  at  the  time  of  such  paying  out  or  put- 
ting in  circulation  is  not  redeeming  its  circulating  notes 
in  lawful  money  of  the  United  States. 

(Sec.  5208.)  It  shall  be  unlawful  for  any  officer,  clerk, 
or  agent  of  any  national  banking  association  to  certify 
any  check  drawn  upon  the  association  unless  the  person 
or  company  drawing  the  check  has  on  deposit  with  the 
association,  at  the  time  such  check  is  certified,  an 
amount  of  money  equal  to  the  amount  specified  in 
such  check.  Any  check  so  certified  by  duly  authorized 
officers  shall  be  a  good  and  valid  obligation  against  the 
association ;  but  the  act  of  any  officer,  clerk  or  agent  of 
any  association,  in  violation  of  this  section,  shall  subject 
such  bank  to  the  liabilities  and  proceedings  on  the  part 
of  the  Comptroller  as  provided  for  in  section  fifty- two 
hundred  and  thirty-four. 

(Sec.  5210.)  The  president  and  cashier  of  every  na- 
tional banking  association  shall  cause  to  be  kept  at  all 
times  a  full  and  correct  list  of  the  names  and  residences 
of  all  the  shareholders  in  the  association,  and  the  num- 
ber of  shares  held  by  each,  in  the  office  where  its  busi- 
ness is  transacted.  Such  list  shall  be  subject  to  the 
inspection,  of  all  the  shareholders  and  creditors  of  the 
association,  and  the  officers  authorized  to  assess  taxes 
under  State  authority,  during  business-hours  of  each  day 
in  which  business  may  be  legally  transacted.  A  copy  of 
such  list,  on  the  first  Monday  of  July  of  each  year,  veri- 
fied by  the  oath  of  such  president  or  cashier,  shall  be 
transmitted  to  the  Comptroller  of  the  Currency. 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


231 


(Sec.  5211.)  Every  association  shall  make  to  the 
Comptroller  of  the  Currency  not  less  than  five  reports 
during-  each  year  according  to  the  form  which  may  be 
prescribed  by  him,  verified  by  the  oath  or  affirmation  of 
the  president  or  cashier  of  such  association,  and  attested 
by  the  signature  of  at  least  three  of  the  directors.  Each 
such  report  shall  exhibit,  in  detail  and  under  appropri- 
ate heads,  the  resources  and  liabilities  of  the  associations 
at  the  close  of  business  on  any  past  day  by  him  specified; 
and  shall  be  transmitted  to  the  Comptroller  within  five 
days  after  the  receipt  of  a  request  or  requisition  therefor 
from  him,  and  in  the  same  form  in  which  it  is  made  to 
the  Comptroller  shall  be  published  in  a  newspaper  pub- 
lished in  the  place  where  such  association  is  established, 
or  if  there  is  no  newspaper  in  the  place,  then  in  the  one 
published  nearest  thereto  in  the  same  county,  at  the  ex- 
pense of  the  association;  and  such  proof  of  publication 
shall  be  furnished  as  may  be  required  by  the  Comp- 
troller. The  Comptroller  shall  also  have  power  to  call 
for  special  reports  from  any  particular  association  when- 
ever in  his  judgment  the  same  are  necessary  in  order  to 
a  full  and  complete  knowledge  of  its  condition. 

(Sec.  5212.)  In  addition  to  the  reports  required  by 
the  preceding  section,  each  association  shall  report  to  the 
Comptroller  of  the  Currency,  within  ten  days  after  de- 
claring any  dividend,  the  amount  of  such  dividend,  and 
the  amount  of  net  earnings  in  excess  of  such  dividend. 
Such  reports  shall  be  attested  by  the  oath  of  the  presi- 
dent or  cashier  of  the  association. 

(Sec.  5213.)  Every  association  which  fails  to  make 
and  transmit  any  report  required  under  either  of  the  two 
preceding  sections  shall  be  subject  to  a  penalty  of  one 
hundred  dollars  for  each  day  after  the  periods,  respect- 
ively, therein  mentioned,  that  it  delays  to  make  and 
transmit  its  report.  Whenever  any  association  delays  or 
refuses  to  pay  the  penalty  herein  imposed,  after  it  has 
been  assessed  by  the  Comptroller  of  the  Currency,  the 
amount  thereof  may  be  retained  by  the  Treasurer  of  the 
United  States,  upon  the  order  of  the  Comptroller  of  the 
Currency,  out  of  the  interest,  as  it  may  become  due  to 
the  association,  on  the  bonds   deposited  with  him  to 


Provisions 
relative  to 
reports  of 
associa- 
tions to 
Comp- 
troller. 


Reports  of 
dividends 
and  earn- 
ings. 


Penalty  for 
failure  to 
make 
reports  to 
Comp- 
troller. 


232 


HAND-BOOK    OF    FINANCE. 


Duty  on 

circulation, 
deposits, 
and  capital 
stock. 


Semi- 
annual 
return  of 
circulation, 
deposits, 
and  capital 
stock. 


Penalty  for 
failure  to 
make 
return. 


Method  of 
assessment 
if  return  is 
not  made. 


How  tax 
may  be 
collected  if 
association 
fails  to  pay. 


secure  circulation.  All  sums  of  rnoney  collected  for 
penalties  under  this  section  shall  be  paid  into  the  Treas- 
ury of  the  United  States. 

(Sec.  5214.)  In  lieu  of  all  existing  taxes,  every  asso- 
ciation shall  pay  to  the  Treasurer  of  the  United  States, 
in  the  months  of  January  and  July,  a  duty  of  one-half  of 
one  per  centum  each  half  year  upon  the  average  amount 
of  its  notes  m  circulation,  and  a  duty  of  one-quarter  of 
one  per  centum  each  half  year  upon  the  average  amount 
of  its  deposits,  and  a  duty  of  one-quarter  of  one  per 
centum  each  half  year  on  the  average  amount  of  its 
capital  stock,  beyond  the  amount  invested  in  United 
States  bonds. 

(Sec.  5215.)  In  order  to  enable  the  Treasurer  to  assess 
the  duties  imposed  by  the  preceding  section,  each  asso- 
ciation shall,  within  ten  days  from  the  first  days  of 
January  and  July  of  each  year,  make  a  return,  under  the 
oath  of  its  president  or  cashier,  to  the  Treasurer  of  the 
United  States,  in  such  form  as  the  Treasurer  may  pre- 
scribe, of  the  average  amount  of  its  notes  in  circulation, 
and  of  the  average  amount  of  its  deposits,  and  of  the 
average  amount  of  its  capital  stock,  beyond  the  amount 
invested  in  United  States  bonds,  for  the  six  months  next 
preceding  the  most  recent  first  day  of  January  or  July. 
Every  association  which  fails  so  to  make  such  return 
shall  be  liable  to  a  penalty  of  two  hundred  dollars,  to  be 
collected  either  out  of  the  interest  as  it  may  become  due 
such  association  on  the  bonds  deposited  with  the  Treas- 
urer, or,  at  his  option,  in  the  manner  in  which  penalties 
are  to  be  collected  of  other  corporations  under  the  laws 
of  the  United  States. 

(Sec.  5216.)  Whenever  any  association  fails  to  make 
the  half-yearly  return  required  by  the  preceding  section, 
the  duties  to  be  paid  by  such  association  shall  be  assessed 
upon  the  amount  of  notes  delivered  to  such  association 
by  the  Comptroller  of  the  Currency,  and  upon  the  highest 
amount  of  its  deposits  and  capital  stock,  to  be  ascertained 
in  such  manner  as  the  Treasurer  may  deem  best. 

(Sec.  5217.)  Whenever  an  association  fails  to  pay  the 
duties  imposed  by  the  three  preceding  sections,  the  sums 
due  may  be  collected  in  the  manner  provided  for  the  col- 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


233 


lection  of  United  States  taxes  from  other  corporations; 
or  the  Treasurer  may  reserve  the  amount  out  of  the 
interest,  as  it  may  become  due,  on  the  bonds  deposited 
with  him  by  such  defaulting  association. 

(Sec.  5218.)  In  all  cases  where  an  association  has 
paid  or  may  pay  in  excess  of  what  may  h%  or  has  been 
found  due  from  it,  on  account  of  the  duty  required  to  be 
paid  to  the  Treasurer  of  the  United  States,  the  associa- 
tion may  state  an  account  therefor,  which,  on  being-  cer- 
tified by  the  Treasurer  of  the  United  States,  and  found 
correct  by  the  First  Comptroller  of  the  Treasury,  shall  be 
refunded  in  the  ordinary  manner  by  warrant  on  the 
Treasury. 

(Sec.  5219.)  Nothing  herein  shall  prevent  all  the 
shares  in  any  association  from  being  included  in  the 
valuation  of  the  personal  property  of  the  owner  or  holder 
of  such  shares,  in  assessing  taxes  imposed  by  authority  of 
the  State  within  which  the  association  is  located ;  but  the 
legislature  of  each  State  may  determine  and  direct  the 
manner  and  place  of  taxing  all  the  shares  of  national 
banking  associations  located  within  the  State,  subject 
only  to  the  two  restrictions,  that  the  taxation  shall  not 
be  at  a  greater  rate  than  is  assessed  upon  other  moneyed 
capital  in  the  hands  of  individual  citizens  of  such  State, 
and  that  the  shares  of  any  national  banking  association 
owned  by  non-residents  of  any  State  shall  be  taxed  in 
the  city  or  town  where  the  bank  is  located,  and  not  else- 
where. Nothing  herein  shall  be  construed  to  exempt  the 
real  property  of  associations  from  either  State,  county,  or 
municipal  taxes,  to  the  same  extent,  according  to  its 
value,  as  other  real  property  is  taxed. 

(Sec.  5240.)  The  Comptroller  of  the  Currency,  with 
the  approval  of  the  Secretary  of  the  Treasury,  shall,  as 
often  as  shall  be  deemed  necessary  or  proper,  appoint  a 
suitable  person  or  persons  to  make  an  examination  of  the 
affairs  of  every  banking  association,  who  shall  have  power 
to  make  a  thorough  examination  into  all  the  affairs  of  the 
association,  and,  in  doing  so,  to  examine  any  of  the  offi- 
cers and  agents  thereof  on  oath :  and  shall  make  a  full 
and  detailed  report  of  the  condition  of  the  association  to 
the  Comptroller.  All  persons  appointed  to  be  examiners 
10* 


Refunding 
excess  of 
duties  paid. 


Provisions 
relative  to 
State 

taxation  of 
associa- 
tions. 
Bank  of 
•''oamierce 
vs.  New 
York  Chy, 
2B1.  620: 
Van  Allen 
vs.  The 
Assessors, 

3  Wall.  573; 
People  vs. 
The  Com- 
missioners, 

4  Wall.  244; 
Bradley  Vs. 
The  People, 
4  Wall.  459; 
National 
Bank  vs. 
The  Com- 
monwealth, 
9  Wall.  353; 
Lionberger 
vs.  Rouse. 

9  Wall.  468. 
Appoint- 
ment, 
powers  and 
duties  of 
bank 
examiners. 


234 


HAXD-BOOK   OF   FINANCE. 


Compensa- 
tion of 
examiners. 
Act  of  Feb. 
19,  1875, 
amending 
Rev.  Stat. 


Not  to 
examine 
banks  of 
which  they 
are  officers. 

Limitation 
of  visitorial 
powers. 

Use  of  the 
word 

"national " 
in  title, 
prohibited 
to  other 
than 
national 
banks. 


of  national  banks  not  located  in  the  redemption-cities  spe- 
cified in  section  five  thousand  one  hundred  and  ninety- 
two  of  the  Revised  Statutes  of  the  United  States,  or  in 
any  one  of  the  States  of  Oregon,  California  and  Nevada, 
or  in  the  Territories,  shall  receive  compensation  for  such 
examination  as  follows:  For  examining  national  banks 
having  a  capital  less  than  one  hundred  thousand  dollars, 
twenty  dollars;  those  having  a  capital  of  one  hundred 
thousand  dollars  and  less  than  three  hundred  thousand 
dollars,  twenty-five  dollars;  those  having  a  capital  of 
three  hundred  thousand  dollars  and  less  than  four  hun- 
dred thousand  dollars,  thirty-five  dollars;  those  having  a 
capital  of  four  hundred  thousand  dollars  and  less  than 
five  hundred  thousand  dollars,  forty  dollars;  those  having 
a  capital  of  five  hundred  thousand  dollars  and  less  than 
six  hundred  thousand  dollars,  fifty  dollars;  those  having 
a  capital  of  six  hundred  thousand  dollars  and  over, 
seventy- five  dollars;  which  amounts  shall  be  assessed  by 
the  Comptroller  of  the  Currency  upon,  and  paid  by,  the 
respective  associations  so  examined,  and  shall  be  in  lieu 
of  the  compensation  and  mileage  heretofore  allowed  for 
making  said  examinations;  and  persons  appointed  to 
make  examination  of  national  banks  in  the  cities  named 
in  section  five  thousand  one  hundred  and  ninety-two  of 
the  Revised  Statutes  of  the  United  States,  or  in  any  one 
of  the  States  of  Oregon,  California  and  Nevada,  or  in  the 
Territories,  shall  receive  such  compensation  as  may  be 
fixed  by  the  Secretary  of  the  Treasury  upon  the  recom- 
mendation of  the  Comptroller  of  the  Currency;  and  the 
same  shall  be  assessed  and  paid  in  the  manner  herein- 
before provided.  But  no  person  shall  be  appointed  to 
examine  the  affairs  of  any  banking  association  of  which 
he  is  a  director  or  other  officer. 

(Sec.  5241.)  No  association  shall  be  subject  to  any 
visitorial  powers  other  than  such  as  are  authorized  by 
this  Title,  or  are  vested  in  the  courts  of  justice. 

(Sec.  5243.)  All  banks  not  organized  and  transacting 
business  under  the  national-currency  laws,  or  under  this 
Title,  and  all  persons  or  corporations  doing  the  business 
of  bankers,  brokers,  or  savings  institutions,  except 
savings-banks  authorized  by  Congress  to  use  the  word 


NATIONAL   BANKS    AND    BANK    CUIIRENCY. 


235 


"national  "  asa  part  of  their  corporate  name,  are  pro- 
hibited from  using  the  word  ' '  national  "  asa  portion  of 
the  name  or  title  of  such  bank,  corporation,  firm  or 
partnership ;  and  any  violation  of  this  prohibition  com- 
mitted after  the  third  day  of  September,  eighteen  hun- 
dred and  seventy-three,  shall  subject  the  party  charge- 
able therewith  to  a  penalty  of  fifty  dollars  for  each  day 
during  which  it  is  committed  or  repeated. 


CHAPTER  IV. 


DISSOLUTION   AND   RECEIVERSHIP. 

(Sec.  5220.)  Any  association  may  go  into  liquidation 
and  be  closed  by  the  vote  of  its  shareholders  owning 
two-thirds  of  its  stock. 

(Sec.  5221.)  Whenever  a  vote  is  taken  to  go  into 
liquidation  it  shall  be  the  duty  of  the  board  of  directors 
to  cause  notice  of  this  fact  to  be  certified,  under  the  seal 
of  the  association,  by  its  president  or  cashier,  to  the 
Comptroller  of  the  Currency,  and  publication  thereof  to 
be  made  for  a  period  of  two  months  in  a  newspaper  pub- 
lished in  the  city  of  New  York,  and  also  in  a  newspaper 
published  in  thy  city  or  town  in  which  the  association  is 
located,  or  if  no  newspaper  is  there  published,  then  in 
the  newspaper  published  nearest  thereto,  that  the  associ- 
ation is  closing  up  its  affairs,  and  notifying  the  holders 
of  its  notes  and  other  creditors  to  present  the  notes  and 
other  claims  against  the  association  for  payment. 

(Sec.  5222.)  Within  six  months  from  the  date  of  the 
vote  to  go  into  liquidation,  the  association  shall  deposit 
with  the  Treasurer  of  the  United  States,  lawful  money 
of  the  United  States  sufficient  to  redeem  all  its  outstand- 
ing circulation.  The  Treasurer  shall  execute  duplicate 
receipts  for  money  thus  deposited,  and  deliver  one  to  the 
association  and  the  other  to  the  Comptroller  of  the  Cur- 
rency, stating  the  amount  received  by  him,  and  the  pur- 
pose for  which  it  has  been  received;  and  the  money  shall 
be  paid  into  the  Treasury  of  the  United  States,  and 
placed  to  the  credit  of  such  association  upon  redemption 
account. 


Voluntary 
liquidation. 


Notice  of 
intention 
to  go  into 
liquidation. 


Deposit  of 
lawful 
money  to 
redeem 

circulation. 


236 


HAXD-BOOK    OF    FIXAXCE, 


Consolidat- 
ing banks 
need  not 
deposit 
lawful 
money. 


lie-assign- 
ment of 
bonds  to 
closed 
banks. 


Notes  to  be 

redeemed 

atTreasury. 

Proceed- 
ings when 
association 
fails  to 
deposit 
lawful 
money. 

See  act  of 
Feb.  18, 
1875, 

correcting 
Rev.  Stat. 


Destruction 
ofredeemed 
notes. 


Act  of  June 
23,  1874. 


Mode  of 
protesting 


(Sec.  5223.)  An  association  which  is  in  good  faith 
winding  up  its  business  for  the  purpose  of  consolidating 
with  another  association  shall  not  be  required  to  deposit 
lawful  money  for  its  outstanding  circulation;  but  its 
assets  and  liabilities  shall  be  reported  by  the  association 
with  which  it  is  in  process  of  consolidation. 

(Sec.  5224.)  Whenever  a  sufficient  deposit  of  lawful 
money  to  redeem  the  outstanding  circulation  of  an 
association  proposing  to  close  its  business  has  been 
made,  the  bonds  deposited  by  the  association  to  secure 
payment  of  its  notes  shall  be  re-assigned  to  it,  in  the 
manner  prescribed  by  section  fifty-one  hundred  and 
sixty-two.  And  thereafter  the  association  and  its  share- 
holders shall  stand  discharged  from  all  liabilities  upon 
the  circulating  notes,  and  those  notes  shall  be  redeemed 
at  the  Treasury  of  the  United  States.  And  if  any  such 
bank  shall  fail  to  make  the  deposit  and  take  up  its  bonds 
for  thirty  days  after  the  expiration  of  the  time  specified, 
the  Comptroller  of  the  Currency  shall  have  power  to  sell 
the  bonds  pledged  for  the  circulation  of  said  bank,  at 
public  auction  in  Xew  York  city,  and,  after  providing 
for  the  redemption  and  cancellation  of  said  circulation, 
and  the  necessary  expenses  of  the  sale,  to  pay  over  any 
balance  remaining  to  the  bank  or  its  legal  representative. 

(Sec.  5225.)  Whenever  the  Treasurer  has  redeemed 
any  of  the  notes  of  an  association  which  has  commenced 
to  close  its  affairs  under  the  six  [five]  preceding  sections, 
he  shall  cause  the  notes  to  be  mutilated  and  charged  to 
the  redemption  account  of  the  association;  and  all  notes 
so  redeemed  by  the  Treasurer  shall,  every  three  months, 
be  certified  to  and  destroyed  in  the  manner  prescribed  in 
section  fifty-one  hundred  and  eighty-four. 

(Sec.  5226.)  Whenever  any  national  banking  associa- 
tion fails  to  redeem  in  the  lawful  money  of  the  United 
States  any  of  its  circulating  notes,  upon  demand  of  pay- 
ment duly  made  during  the  usual  hours  of  business,  at 
the  office  of  such  association,  or  at  its  designated  place 
of  redemption,  the  holder  may  cause  the  same  to  be 
protested,  in  one  package,  by  a  notary  public,  unless  the 
president  or  cashier  of  the  association  whose  notes  are 
presented  for  payment,  or  the  president  or  cashier  of  the 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


237 


association  at  the  place  at  which  they  are  redeemable 
offers  to  waive  demand  and  notice  of  the  protest,  and, 
in  pursuance  of  such  offer,  makes,  signs,  and  delivers  to 
the  party  making  such  demand  an  admission  in  writing, 
stating  the  time  of  the  demand,  the  amount  demanded, 
and  the  fact  of  the  non-payment  thereof.  The  notary 
public,  on  making  such  protest,  or  upon  receiving  such 
admission,  shall  forthwith  forward  such  admission  or 
notice  of  protest  to  the  Comptroller  of  the  Currency, 
retaining  a  copy  thereof.  If,  however,  satisfactory  proof 
is  produced  to  the  notary  public  that  the  payment  of  the 
notes  demanded  is  restrained  by  order  of  any  court  of 
competent  jurisdiction,  he  shall  not  protest  the  same. 
When  the  holder  of  any  notes  causes  more  than  one  note 
or  package  to  be  protested  on  the  same  clay,  he  shall  not 
receive  pay  for  more  than  one  protest. 

(Sec.  5227.)  On  receiving  notice  that  any  national 
banking  association  has  failed  to  redeem  any  of  its  circu- 
lating notes,  as  specified  in  the  preceding  section,  the 
Comptroller  of  the  Currency,  with  the  concurrence  of  the 
Secretary  of  the  Treasury,  may  appoint  a  special  agent, 
of  whose  appointment  immediate  notice  shall  be  given 
to  such  association,  who  shall  immediately  proceed  to 
ascertain  whether  it  has  refused  to  pay  its  circulating 
notes  in  the  lawful  money  of  the  United  States,  when 
demanded,  and  shall  report  to  the  Comptroller  the  fact 
so  ascertained.  If,  from  such  protest,  and  the  report  so 
made,  the  Comptroller  is  satisfied  that  such  association 
has  refused  to  pay  its  circulating  notes  and  is  in  default, 
he  shall,  within  thirty  days  after  he  has  received  notice 
of  such  failure,  declare  the  bonds  deposited  by  such 
association  forfeited  to  the  United  States,  and  they  shall 
thereupon  be  20  forfeited. 

(Sec.  5228.)  After  a  default  on  the  part  of  an  asso- 
ciation to  pay  any  of  its  circulating  notes  has  been 
ascertained  by  the  Comptroller,  and  notice  thereof  has 
been  given  by  him  to  the  association,  it  shall  not  be  law- 
ful for  the  association  suffering  the  same  to  pay  out  any 
of  its  notes,  discount  any  notes  or  bills,  or  otherwise 
prosecute  the  business  of  banking,  except  to  receive  and 


One  protest 
fee.  only, 
on  same- 
day. 


Examina- 
tion by 
special 
agent,  after 
notice  of 
protest. 


Forfeiture 
of  bonds. 


Association 
not  1<)  do 
business 
after  notice 
of  protest. 

Art  of  Feb. 
18,  1875, 
correcting 
Rev.  Stat. 


238 


HAXD-BOOK    OF   FINANCE. 


Notice  to 
noteholders. 


Redemp- 
tion of 
notes  at 
Treasury, 
and  cancel- 
lation of 
bonds. 


Sale  of 
bonds  at 

auction. 


The  United 
States  to 
have  a 
paramount 

lien  upon 
assets  of  as- 
sociations. 


Sale  of 
bonds  at 
private  sale. 


Transfer  of 
bonds  sold. 


safely  keep  money  belonging  to  it,  and  to  deliver  special 
deposits. 

(Sec.  5229.)  Immediately  upon  declaring  the  bonds 
of  an  association  forfeited  for  non-payment  of  its  notes, 
the  Comptroller  shall  give  notice,  in  such  manner  as  the 
Secretary  of  the  Treasury  shall,  by  general  rules  or 
otherwise,  direct,  to  the  holders  of  the  circulating  notes 
of  such  association,  to  present  them  for  payment  at  the 
Treasury  of  the  United  States;  and  the  same  shall  be 
paid  as  presented  in  lawful  money  of  the  United  States; 
whereupon  the  Comptroller  may,  in  his  discretion,  cancel 
an  amount  of  bonds  pledged  by  such  association  equal 
at  current  market  rates,  not  exceeding  par,  to  the  notes 
paid. 

(Sec.  5230.)  Whenever  the  Comptroller  has  become 
satisfied,  by  the  protest  or  the  waiver  and  admission 
specified  in  section  fifty-two  hundred  and  twenty-six,  or 
by  the  report  provided  for  in  section  fifty-two  hundred 
and  twenty-seven,  that  any  association  has  refused  to 
pay  its  circulating  notes,  he  may,  instead  of  canceling 
its  bonds,  cause  so  much  of  them  as  may  be  necessary  to 
redeem  its  outstanding  notes  to  be  sold  at  public  auction 
in  the  city  of  New  York,  after  giving  thirty  days1  notice 
of  such  sale  to  the  association.  For  any  deficiency  m 
the  proceeds  of  all  the  bonds  of  an  association,  when 
thus  sold,  to  reimburse  to  the  United  States  the  amount 
expended  in  paying  the  circulating  notes  of  the  associa- 
tion, the  United  States  shall  have  a  paramount  lien  upon 
all  its  assets;  and  such  deficiency  shall  be  made  good  out 
of  such  assets  in  preference  to  any  and  all  other  claims 
whatsoever,  except  the  necessary  costs  and  expenses  of 
administering  the  same. 

(Sec.  5231.)  The  Comptroller  may,  if  he  deems  it  for 
the  interest  of  the  United  States,  sell  at  private  sale  any 
of  the  bonds  of  an  association  shown  to  have  made 
default  in  paying  its  notes,  and  receive  therefor  either 
money  or  the  circulating  notes  of  the  association.  But 
no  such  bonds  shall  be  sold  by  private  sale  for  less  than 
par,  nor  for  less  than  the  market  value  thereof  at  the 
time  of  sale;  and  no  sales  of  any  such  bonds,  either 
public  or  private,  shall  be  complete  until  the  transfer  of 


NATIONAL   BANKS    AND    BANK    CURRENCY. 


239 


the  bonds  shall  have  been  made  with  the  formalities  pre- 
scribed by  sections  fifty-one  hundred  and  sixty-two,  fifty- 
one  hundred  and  sixty-three,  and-fifty-one  hundred  and 
sixty-four. 

(Sec.  5232.)  The  Secretary  of  the  Treasury  may,  from 
time  to  time,  make  such  regulations  respecting  the  dis- 
position to  be  made  of  circulating  notes  after  presenta- 
tion at  the  Treasury  of  the  United  States  for  payment, 
and  respecting  the  perpetuation  of  the  evidence  of  the 
payment  thereof,  as  may  seem  to  him  proper. 

(Sec.  5233.)  All  notes  of  national  banking  associa- 
tions presented  at  the  Treasury  of  the  United  States  for 
payment  shall,  on  being  paid,  be  canceled. 

(Sec.  5234.)  On  becoming  satisfied,  as  specified  in 
sections  fifty- two  hundred  and  twenty- six  and  fifty- two 
hundred  and  twenty-seven,  that  any  association  has 
refused  to  pay  its  circulating  notes  as  therein  mentioned, 
and  is  in  default,  the  Comptroller  of  the  Currency  may 
forthwith  appoint  a  receiver,  and  require  of  him  such 
bond  and  security  as  he  deems  proper.  Such  receiver, 
under  the  direction  of  the  Comptroller,  shall  take  posses- 
sion of  the  books,  records,  and  assets  of  every  descrip- 
tion of  such  association,  collect  all  debts,  dues,  and  claims 
belonging  to  it,  and,  upon  the  order  of  a  court  of  record 
of  competent  jurisdiction,  may  sell  or  compound  all  bad 
or  doubtful  debts,  and,  on  a  like  order,  may  sell  all  the 
real  and  personal  property  of  such  association,  on  such 
terms  as  the  court  shall  direct;  and  may,  if  necessary  to 
pay  the  debts  of  such  association,  enforce  the  individual 
liability  of  the  stockholders.  Such  receiver  shall  pay 
over  all  money  so  made  to  the  Treasurer  of  the  United 
States,  subject  to  the  order  of  the  Comptroller,  and  also 
make  report  to  the  Comptroller  of  all  his  acts  and  pro- 
ceedings. 

That  whenever  any  national  banking  association  shall 
be  dissolved,  and  its  rights,  privileges,  and  franchises 
declared  forfeited,  as  prescribed  in  section  fifty-two  hun- 
dred and  thirty-nine  of  the  Revised  Statutes  of  the  United 
States,  or  whenever  any  creditor  of  any  national  banking 
association  shall  have  obtained  a  judgment  against  it  in 
any  court  of  record,  and  made  application,  accompanied 


Disposition 
to  be  made 
of  notes  re- 
deemed by 
Treasurer. 


Cancella- 
tion of 
notes. 

Appoint- 
ment and 
duties  of 
receivers. 
Kennedy 
vs.  Gibson, 
8  Wall.  498; 
Bank  of 
Bethel  vs. 
Pabquioque 
Bmk.  14 
Wall.  38:J; 
Bank  vs. 
Kennedy.  10 
Wall.  19; 
In  re.  Piatt, 
Receiver, 
etc.,  1  Ben. 
534. 


June  30, 
1870. 


240 


HAND-BOOK    OF    FINANCE. 


When  the 
Comptroll- 
er may 
appoint  a 

receiver. 


Liability  of 
stockhold- 
ers of 
liquidating 
banks. 


Comptroll- 
er shall  call 
meetings  of 
sharehold- 
ers of  banks 
inthe  hands 
of receivers. 


by  a  certificate  from  the  clerk  of  the  court  stating  that 
such  judgment  has  been  rendered  and  has  remained  un- 
paid for  the  space  of  thirty  days ;  or  whenever  the  Comp- 
troller shall  become  satisfied  of  the  insolvency  of  a 
national  banking  association,  he  may,  after  due  exam- 
ination of  its  affairs,  in  either  case,  appoint  a  receiver, 
who  shall  proceed  to  close  up  such  association,  and 
enforce  the  personal  liability  of  the  shareholders,  as  pro- 
vided in  section  fifty-two  hundred  and  thirty-four  of  said 
statutes. 

That  when  any  national  banking  association  shall  have 
gone  into  liquidation  under  the  provisions  of  section  five 
thousand  two  hundred  and  twenty  of  said  statutes,  the 
individual  liability  of  the  shareholders  provided  for  by 
section  fifty-one  hundred  and  fifty-one  of  said  statutes 
may  be  enforced  by  any  creditor  of  such  association,  by 
bill  in  equity  in  the  nature  of  a  creditor's  bill,  brought 
by  such  creditor  on  behalf  of  himself  and  of  all  other 
creditors  of  the  association,  against  the  shareholders 
thereof,  hi  any  court  of  the  United  States  having  original 
jurisdiction  in  equity  for  the  district  in  which  such  asso- 
ciation may  have  been  located  or  established. 

That  whenever  any  association  shall  have  been  or 
shall  be  placed  in  the  hands  of  a  receiver,  as  provided 
in  section  fifty-two  hundred  and  thirty-four  and  other 
sections  of  said  statutes,  and  when,  as  provided  in  sec- 
tion fifty-two  hundred  and  thirty-six  thereof,  the  Comp- 
troller shall  have  paid  to  each  and  every  creditor  of  such 
association,  not  including  shareholders  who  are  creditors 
of  such  association,  whose  claim  or  claims  as  such  creditor 
shall  have  been  proved,  or  allowed  as  therein  prescribed, 
the  full  amount  of  such  claims  and  all  expenses  of  the 
receivership,  and  the  redemption  of  the  circulating  notes 
of  such  association  shall  have  been  provided  for  by 
depositing  lawful  money  of  the  United  States  with  the 
Treasurer  of  the  United  States,  the  Comptroller  of  the 
Currency  shall  call  a  meeting  of  the  shareholders  of  such 
association  by  giving  notice  thereof  for  thirty  days  in  a 
newspaper  published  in  the  town,  city,  or  county  where 
the  business  of  such  association  was  carried  on,  or  if  no 
newspaper  is  there  published,  in  the  newspaper  published 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


241 


nearest  thereto,  at  which  meeting  the  shareholders  shall 
elect  an  agent,  voting  by  ballot,  in  person  or  by  proxy, 
each  share  of  stock  entitling  the  holder  to  one  vote;  and 
when  such  agent  shall  have  received  votes  representing 
at  least  a  majority  of  the  stock  in  value  and  number  of 
shares,  and  when  any  of  the  shareholders  of  the  associa- 
tion shall  have  executed  and  filed  a  bond  to  the  satisfac- 
tion of  the  Comptroller  of  the  Currency,  conditioned  for 
the  payment  and  discharge  in  full  of  any  and  every 
claim  that  may  hereafter  be  proved  and  allowed  against 
such  association  by  and  before  a  competent  court,  and 
for  the  faithful  performance  and  discharge  of  all  and 
singular  the  duties  of  such  trust,  the  Comptroller  and 
the  receiver  shall  thereupon  transfer  and  deliver  to  such 
agent  all  the  undivided  or  uncollected  or  other  assets 
and  property  of  such  association  then  remaining  in  the 
hands  or  subject  to  the  order  or  control  of  said  Comp- 
troller and  said  receiver,  or  either  of  them ;  and  for  this 
purpose,  said  Comptroller  and  said  receiver  are  hereby 
severally  empowered  to  execute  any  deed,  assignment, 
transfer,  or  other  instrument  in  writing  that  may  be 
necessary  and  proper;  whereupon  the  said  Comptroller 
and  the  said  receiver  shall,  by  virtue  of  this  act,  be 
discharged  and  released  from  any  and  all  liabilities 
to  such  association,  and  to  each  and  all  of  the  creditors 
and  shareholders  thereof;  and  such  agent  is  hereby 
authorized  to  sell,  compromise,  or  compound  the  debts 
due  to  such  association  upon  the  order  of  a  competent 
court  of  record  or  of  the  United  States  circuit  court  for 
the  district  where  the  business  of  the  association  was 
carried  on.  Such  agent  shall  hold,  control,  and  dispose 
of  the  assets  and  property  of  any  association  which  he 
may  receive  as  hereinbefore  provided  for  the  benefit  of 
the  shareholders  of  such  association  as  they,  or  a  ma- 
jority of  them  in  value  or  number  of  shares,  may  direct, 
distributing  such  assets  and  property  among  such  share- 
holders in  proportion  to  the  shares  held  by  each;  and 
he  may,  in  his  own  name  or  in  the  name  of  such  asso- 
ciation, sue  and  be  sued,  and  do  all  other  lawful  acts 
and  things  necessary  to  finally  settle  and  distribute  the 
assets  and  property  in  his  hands.     In  selecting  an  agent 

11 


Transfer  of 
assets  of 
bank  to 
agent  of  the 
shareholder. 


242 


HAND-BOOK    OF   FINANCE. 


Notice  by 

Comptroller 

tocreditors. 


Dividends 
by  Comp- 
troller to 
creditors. 
Bank  of 
Betbel  vs. 
Pahquioque 
Bank,  14 
Wall.  383. 


Injunction 
upon 
receiver- 
ship. 


as  hereinbefore  provided,  administrators  or  executors  of 
deceased  shareholders  may  act  and  sign  as  the  decedent 
might  have  done  if  living,  and  guardians  may  so  act 
and  sign  for  their  ward  or  wards. 

(Sec.  5235.)  The  Comptroller  shall,  upon  appointing 
a  receiver,  cause  notice  to  be  given,  by  advertisement 
in  such  newspapers  as  he  may  direct,  for  three  consecu- 
tive months,  calling  on  all  persons  who  may  have  claims 
against  such  association  to  present  the  same,  and  to 
make  legal  proof  thereof. 

(Sec  5236.)  From  time  to  time,  after  full  provision 
has  been  first  made  for  refunding  to  the  United  States 
any  deficiency  in  redeeming  the  notes  of  such  association, 
the  Comptroller  shall  make  a  ratable  dividend  of  the 
money  so  paid  over  to  him  by  such  receiver  on  all  such 
claims  as  may  have  been  proved  to  his  satisfaction  or 
adjudicated  in  a  court  of  competent  jurisdiction,  and, 
as  the  proceeds  of  the  assets  of  such  association  are 
paid  over  to  him,  shall  make  further  dividends  on  all 
claims  previously  proved  or  adjudicated;  and  the 
remainder  of  the  proceeds,  if  any,  shall  be  paid  over  to 
the  shareholders  of  such  association,  or  their  legal  repre- 
sentatives, hi  proportion  to  the  stock  by  them  respectively 
held. 

(Sec.  5237.)  Whenever  an  association  against  which 
proceedings  have  been  instituted,  on  account  of  any  al- 
leged refusal  to  redeem  its  circulating  notes  as  afore- 
said, denies  having  failed  to  do  so,  it  may,  at  any  time 
within  ten  days  after  it  has  been  notified  of  the  appoint- 
ment of  an  agent,  as  provided  in  section  fifty-two  hun- 
dred and  twenty-seven,  apply  to  the  nearest  circuit,  or 
district,  or  territorial  court  of  the  United  States  to  enjoin 
further  proceedings  in  the  premises;  and  such  court,  after 
citing  the  Comptroller  of  the  Currency  to  show  cause  why 
further  proceedings  should  not  be  enjoined,  and  after  the 
decision  of  the  court  or  finding  of  a  jury  that  such  asso- 
ciation has  not  refused  to  redeem  its  circulating  notes, 
when  legally  presented,  in  the  lawful  money  of  the 
United  States,  shall  make  an  order  enjoining  the  Comp- 
troller, and  any  receiver  acting  under  his  direction,  from 
all  further  proceedings  on  account  of  such  alleged  refusal. 


NATIONAL   BANKS   AND    BANK    CURRENCY. 


243 


(Sec.  5238.)  All  fees  for  protesting  the  notes  issued 
by  any  national  banking  association  shall  be  paid  by  the 
person  procuring  the  protest  to  be  made,  and  such  asso- 
ciation shall  be  liable  therefor;  but  no  part  of  the  bonds 
deposited  by  such  association  shall  be  applied  to  the  pay- 
ment of  such  fees.  All  expenses  of  any  preliminary  or 
other  examinations  into  the  condition  of  any  association 
shall  be  paid  by  such  association.  All  expenses  of  any 
receivership  shall  be  paid  out  of  the  assets  of  such  asso- 
ciation before  distribution  of  the  proceeds  thereof. 

(Sec.  5239.)  If  the  directors  of  any  national  banking 
association  shall  knowingly  violate,  or  knowingly  permit 
any  of  the  officers,  agents  or  servants  of  the  association 
to  violate  any  of  the  provisions  of  this  Title,  all  the 
rights,  privileges  and  franchises  of  the  association  shall 
be  thereby  forfeited.  Such  violation  shall,  however,  be 
determined  and  adjudged  by  a  proper  circuit,  district  or 
territorial  court  of  the  United  States,  in  a  suit  brought 
for  that  purpose  by  the  Comptroller  of  the  Currency,  in 
his  own  name,  before  the  association  shall  be  declared 
dissolved.  And  in  cases  of  such  violation,  every  director 
who  participated  in  or  assented  to  the  same  shall  be 
held  liable  in  his  personal  and  individual  capacity  for  all 
damages  which  the  association,  its  shareholders,  or  any 
other  person,  shall  have  sustained  in  consequence  of  such 
violation. 

(Sec.  5242.)  All  transfers  of  the  notes,  bonds,  bills  of 
exchange,  or  other  evidences  of  debt  owing  to  any  na- 
tional banking  association,  or  of  deposits  to  its  credit; 
all  assignments  of  mortgages,  sureties  on  real  estate,  or 
of  judgments  or  decrees  in  its  favor;  all  deposits  of 
money,  bullion,  or  other  valuable  thing  for  its  use,  or  for 
the  use  of  any  of  its  shareholders  or  creditors;  and  all 
payments  of  money  to  either,  made  after  the  commission 
of  an  act  of  insolvency,  or  in  contemplation  thereof, 
made  with  a  view  to  prevent  the  application  of  its  assets 
in  the  manner  prescribed  by  this  chapter,  or  with  a  view 
to  the  preference  of  one  creditor  to  another,  except  in 
payment  of  its  circulating  notes,  shall  be  utterly  null  and 
void. 


Fees  and 
expenses  of 
protest  and 
receiver- 
ship. 


Penalty  for 
violation  of 
provisions 
of  this 
Title. 


Violation, 
how  deter- 
mined. 


Liability 
of  directors 
for  vio- 
lation. 


Transfers, 
assign- 
ments, etc., 
after  an 
act  of 
insolvency, 
void. 


244 


HAND-BOOK    OF   FINANCE. 


Attach- 
ment not 
to  issue 
before  final 
judgment 


No  attachment,  injunction,  or  execution,  shall  be 
issued  against  such  association  or  its  property  before 
final  judgment  in  any  suit,  action,  or  proceeding,  in  any 


in  state         State,  county,  or  municipal  court. 


CHAPTER  V. 


TAX   ON   CIRCULATION   NOT   AUTHORIZED   BY   CONGRESS. 


Capital  of 
State  bank 
converted 
into 

national 
associa- 
tion. 


Circulation, 
when 
exempted 
from  tax. 


Tax  on 

notes  of 
persons  or 
State 
banks, 
used  for 
circulation. 
See  act  of 
Feb.  8, 1875. 
Tax  on 
notes  of 
towns, 
cities,  etc., 
used  for 
circulation. 
Ibid. 
Monthly- 
returns  of 
notes  of 
persons, 
cities, 


(Sec.  3410.)  The  capital  of  any  State  bank  or  banking 
association  which  has  ceased  or  shall  cease  to  exist,  or 
which  has  been  or  shall  be  converted  into  a  national 
bank,  shall  be  assumed  to  be  the  capital  as  it  existed 
immediately  before  such  bank  ceased  to  exist  or  was  con- 
verted as  aforesaid. 

(Sec.  3411.)  Whenever  the  outstanding  circulation  of 
any  bank,  association,  corporation,  company,  or  person 
is  reduced  to  an  amount  not  exceeding  five  per  centum 
of  the  chartered  or  declared  capital  existing  at  the  time 
the  same  was  issued,  said  circulation  shall  be  free  from 
taxation;  and  whenever  any  bank  which  has  ceased  to 
issue  notes  for  circulation,  deposits  in  the  Treasury  of  the 
United  States,  in  lawful  money,  the  amount  of  its  out- 
standing circulation,  to  be  redeemed  at  par,  under  such 
regulations  as  the  Secretary  of  the  Treasury  shall  pre- 
scribe, it  shall  be  exempt  from  any  tax  upon  such  circu- 
lation. 

(Sec.  3412.)  Every  national  banking  association,  State 
bank,  or  State  banking  association,  shall  pay  a  tax  of 
ten  per  centum  on  the  amount  of  notes  of  any  person,  or 
of  any  State  bank  or  State  banking  association,  used  for 
circulation  and  paid  out  by  them. 

(Sec.  3413.)  Every  national  banking  association,  State 
bank,  or  banker,  or  association,  shall  pay  a  tax  of  ten 
per  centum  on  the  amount  of  notes  of  any  town,  city,  or 
municipal  corporation,  paid  out  by  them. 

(Sec.  3414.)  A  true  and  complete  return  of  the 
monthly  amount  of  circulation,  of  deposits,  and  of  cap- 
ital, as  aforesaid,  and  of  the  monthly  amount  of  notes 
of  persons,  town,  city,  or  municipal  corporation,  State 


NATIONAL   BANKS   AND    BANK   CURRENCY. 


245 


banks,  or  State  banking  associations  paid  out  as  afore- 
said for  the  previous  six  months,  shall  be  made  and 
rendered  in  duplicate  on  the  first  day  of  December  and 
the  first  day  of  June,  by  each  of  such  banks,  associa- 
tions, corporations,  companies,  or  persons,  with  a  decla- 
ration annexed  thereto,  under  the  oath  of  such  person, 
or  of  the  president  or  cashier  of  such  bank,  association, 
corporation,  or  company,  in  such  form  and  manner  as 
may  be  prescribed  by  the  Commissioner  of  Internal 
Revenue,  that  the  same  contains  a  true  and  faithful 
statement  of  the  amounts  subject  to  tax,  as  aforesaid; 
and  one  copy  shall  be  transmitted  to  the  collector  of  the 
district  in  which  any  such  bank,  association,  corpora- 
tion, or  company  is  situated,  or  in  which  such  person 
has  his  place  of  business,  and  one  copy  to  the  Commis- 
sioner of  Internal  Revenue. 

(Sec.  3415.)  In  default  of  the  returns  provided  in 
the  preceding  section,  the  amount  of  circulation,  deposit, 
capital,  and  notes  of  persons,  town,  city,  and  municipal 
corporations,  State  banks,  and  State  banking  associations 
paid  out,  as  aforesaid,  shall  be  estimated  by  the  Commis- 
sioner of  Internal  Revenue,  upon  the  best  information 
he  can  obtain.  And  for  any  refusal  or  neglect  to  make 
return  and  payment,  any  such  bank,  association,  corpora- 
tion, company,  or  person  so  in  default  shall  pay  a  penalty 
of  two  hundred  dollars,  besides  the  additional  penalty 
and  forfeitures  provided  in  other  cases. 

(Sec.  3416.)  Whenever  any  State  bank  or  banking 
association  has  been  converted  into  a  national  banking 
association,  and  such  national  banking  association  has 
assumed  the  liabilities  of  such  State  bank  or  banking 
association,  including  the  redemption  of  its  bills,  by  any 
agreement  or  understanding  whatever  with  the  repre- 
sentatives of  such  State  bank  or  banking  association, 
such  national  banking  association  shall  be  held  to  make 
the  required  return  and  payment  on  the  circulation  out- 
standing, so  long  as  such  circulation  shall  exceed  five 
per  centum  of  the  capital  before  such  conversion  of  such 
State  bank  or  banking  association. 

(Sec.  3417.)  The  provisions  of  this  chapter,  relating 
to  the  tax  on  the  deposits,  capital,  and  circulation  of 


State 

banks,  etc., 
paid  out. 
Ibid. 


In  default 
of  reiurns, 
Commis- 
sioner to 
estimate. 


National 
bank  to 
make 
return  and 
payment  of 
tax  of 
converted 
State  bank. 


Provisions 
for  tax  on 
deposits, 


246 


HA^D-BOOK   OF   FINANCE. 


capital  and 
circulation, 
not  to  apply 
to  national 
banks. 
Act  of  Feb. 
18,  1875, 
correcting 
Rev.  Stat. 


United 
States 
securities 
exempt 
from  local 
taxation. 
Bank  vs. 
Super- 
visors, 7 
Wall.  26. 

Tax  on 
bank 
checks. 
Act  of  Feb. 
8,  1875, 
sec.  15. 


Official 
checks 
exempt 
from  tax. 


Unstamped 
checks  not 
admissible 
in  evidence. 


Penalty 
for  failure 
to  stamp 
checks. 


banks,  and  to  their  returns,  except  as  contained  in  sec- 
tions thirty- four  hundred  and  ten,  thirty-four  hundred 
and  eleven,  thirty-four  hundred  and  twelve,  thirty-four 
hundred  and  thirteen,  and  thirty-four  hundred  and  six- 
teen, and  such  parts  of  sections  thirty-four  hundred  and 
fourteen  and  thirty-four  hundred  and  fifteen  as  relate 
to  the  tax  of  ten  per  centum  on  certain  notes,  shall  not 
apply  to  associations  which  are  taxed  under  and  by  virtue 
of  Title  "National  Banks." 

(Sec.  3701.)  All  stocks,  bonds,  treasury  notes,  and 
other  obligations  of  the  United  States,  shall  be  exempt 
from  taxation  by  or  under  State  or  municipal  or  local 
authority. 

stamp-tax  on  bank-checks. 

(Sec.  3418.)  There  shall  be  levied,  collected,  and 
paid  for  and  in  respect  of  every  bank-check,  draft,  or 
order  for  the  payment  of  money,  drawn  upon  any  bank, 
banker,  or  trust  company,  at  sight  or  on  demand,  by  any 
person  who  makes,  signs,  or  issues  the  same,  or  for 
whose  use  or  benefit  the  same  is  made,  signed,  or  issued, 
two  cents. 

(Sec  3420.)  All  bank-checks,  drafts,  or  orders,  as 
aforesaid,  issued  by  the  officers  of  the  United  States 
Government,  or  by  officers  of  any  State,  county,  town, 
or  other  municipal  corporation,  are  exempt  from  taxa- 
tion: Provided,  That  it  is  the  intent  hereby  to  exempt 
from  liability  to  taxation  such  State,  county,  town,  or 
other  municipal  corporations  in  the  exercise  only  of 
functions  strictly  belonging  to  them  in  their  ordinary 
governmental  and  municipal  capacity. 

(Sec  3421.)  No  bank-check,  draft,  or  order,  required 
by  law  to  be  stamped,  which  is  issued  without  being 
duly  stamped,  nor  any  copy  thereof,  shall  be  admitted 
or  used  in  evidence  in  any  court  until  a  legal  stamp, 
denoting  the  amount  of  tax,  is  affixed  thereto,  as  pre- 
scribed by  law. 

(Sec  3422.)  Any  person  or  persons  who  shall  make, 
sign,  or  issue,  or  who  shall  cause  to  be  made,  signed, 
or  issued,  any  instrument,  document,  or  paper  of  any 
kind  or  description  whatsoever,  or  shall  accept,  nego- 


NATIONAL    BANKS    AND    BANK    CURRENCY. 

tiate    or  pay,  or  cause  to  be  accepted,  negotiated,  or 
Pat!  any  ^ft,  or  order,  for  the  payment  of  money, 
Without  the  same  being  duly  stamped,  01 -having  there- 
upon an  adhesive  stamp  for  denoting  the  tax  charge- 
able thereon,  and  canceled  in  the  manner  reared  by 
law,  with  intent  to  evade  the  provisions  of  to >TMe 
shall,  for  every  such  offense,  forfeit  the  sum  of  fifty  dol- 
lars, and  such  instrument,  document  or  paper,  draft   [01 
order,  not  being  stamped  according  to  law    shah  b 
deemed  invalid  and  of  no  effect:    Provuled,  That  here 
after,  in  all  cases  where  the  party  has  no   affixed  to  any 
instrument  the  stamp  required  by  law  thereon,  at  the 
time  of  making  or  issuing  the  said  instrument,  and  he 
or  they,  or  any  party  having  an  interest  therein,  shall  be 
subsequently  desirous  of  affixing  such  stamp  to  said  in- 
strument, or  if  said  instrument  be  lost,  to  a  copy  thereof 
he  or  they  shall  appear  before  the  collector  of  the  revenue 
of  the  proper  district,  who  shall,  upon  the  payment  of 
the  price  of  the  proper  stamp  required  by  law,  and  ot  a 
penalty  of  double  the  amount  of  tax  remaining  unpaid, 
but  in  no  case  less  than  five  dollars,  and  where  the  whole 
amount  of  the  tax  denoted  by  the  stamp  required  shall 
exceed  the  sum  of  fifty  dollars,  on  payment  also  of  mer- 
est, at  the  rate  of  six  per  centum  on  said  tax  from  the 
day  on  which  such  stamp  ought  to  have  been  affixed 
affix  the  proper  stamp  to  such  instrument  or  copy,  and 
note  upon  the  margin  thereof  the  date  of  his  so  doing, 
and  the  fact  that  such  penalty  has  been  paid;  and  the 
same  shall  thereupon  be  deemed  and  held  to  be  as  valid, 
to  all  intents  and  purposes,  as  if  stamped  when  made  or 
issued.  ... 

(Sec  3423  )  In  all  cases  where  an  adhesive  stamp  is 
nsed  for  denoting  any  tax  imposed  under  this  chapter, 
except  as  hereinafter  provided,  the  person  using  or  affix- 
ing the  same  shall  write  thereon  the  initials  of  his  name 
and  the  date  on  which  such  stamp  is  attached  or  used, 
so  that  it  may  not  again  be  used.  And  every  person  who 
fraudulently  makes  use  of  an  adhesive  stamp  to  denote 
any  tax  imposed  by  this  chapter  without  so  effectually 
canceling  and  obliterating  such  stamp,  except  as  before 
mentioned,  shall  forfeit  the  sum  of  fifty  dollars.  .  .  . 


247 


Stamp  may 
be  sub- 
sequently 
affixed  by 
collector. 


Stamps  to 
be  canceled. 


Penalty 
for  fraudu- 
lent use. 


248 


HAND-BOOK    OF    FINANCE. 


Method  of 
cancella- 
tion. 


(Sec.  3424.)  The  Commissioner  of  Internal  Revenue  is 
authorized  to  prescribe  such  method  for  the  cancellation 
of  stamps  as  substitute  for,  or  in  addition  to  the  method 
prescribed  in  this  chapter,  as  he  may  deem  expedient 
and  effectual.  ,  .  . 


CHAPTER  VII. 


CRIMES   AND   MISDEMEANORS. 


Penalty 
for  unlaw- 
fully coun- 
tersigning 
or  deliver- 
ing circulat- 
ing notes. 


Penalty  for 
imitating 
intional- 
bank  notes, 

L-tC 


Penalty  for 
mutilating 
national- 
bank  notes, 
etc. 


(Sec.  5187.)  No  officer  acting  under  the  provisions  of 
this  Title  shall  countersign  or  deliver  to  any  association, 
or  to  any  other  company  or  person,  any  circulating  notes 
contemplated  by  this  Title,  except  in  accordance  with  the 
true  intent  and  meaning  of  its  provisions.  Every  officer 
who  violates  this  section  shall  be  deemed  guilty  of  a  high 
misdemeanor,  and  shall  be  fined  not  more  than  double 
the  amount  so  countersigned  and  delivered,  and  impris- 
oned not  less  than  one  year  and  not  more  than  fifteen 
years. 

(Sec.  5188.)  It  shall  not  be  lawful  to  design,  engrave, 
print,  or  in  any  manner  make  or  execute,  or  to  utter, 
issue,  distribute,  circulate,  or  use,  any  business  or  pro- 
fessional card,  notice,  placard,  circular,  hand-bill,  or 
advertisement,  in  the  likeness  or  similitude  of  any  circu- 
lating note  or  other  obligation  or  security  of  any  banking 
association  organized  or  acting  under  the  laws  of  the 
United  States  which  has  been  or  may  be  issued  under 
this  Title  or  any  act  of  Congress,  or  to  write,  print,  or 
otherwise  impress  upon  any  such  note,  obligation  or 
security  any  business  or  professional  card,  notice  or 
advertisement,  or  any  notice  or  advertisement  of  any 
matter  or  thing  whatever.  Every  person  who  violates 
this  section  shall  be  liable  to  a  penalty  of  one  hundred 
dollars,  recoverable  one-half  to  the  use  of  the  informer. 

(Sec.  5189.)  Every  person  who  mutilates,  cuts,  de- 
faces, disfigures,  or  perforates  with  holes,  or  unites  or 
cements  together,  or  does  any  other  thing  to  any  bank- 
bill,  draft,  note,  or  other  evidence  of  debt,  issued  by  any 
national  banking  association,  or  who  causes  or  procures 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


249 


the  same  to  be  clone,  with  intent  to  render  such  bank- 
bill,  draft,  note,  or  other  evidence  of  debt  unfit  to  be  re- 
issued by  said  association,  shall  be  liable  to  a  penalty  of 
fifty  dollars,  recoverable  by  the  association. 

(Sec.  5207.)  No  association  shall  hereafter  offer  or  re- 
ceive United  States  notes  or  national-bank  notes  as  secur- 
ity or  as  collateral  security  for  any  loan  of  money,  or  for 
a  consideration  agree  to  withhold  the  same  from  use,  or 
offer  or  receive  the  custody  or  promise  of  custody  of  such 
notes  as  security,  or  as  collateral  security,  or  consideration 
for  any  loan  of  money.  Any  association  offending  against 
the  provisions  of  this  section  shall  be  deemed  guilty  of  a 
misdemeanor,  and  shall  be  fined  not  more  than  one  thou- 
sand dollars  and  a  further  sum  equal  to  one  third  of  the 
money  so  loaned.  The  officer  or  officers  of  any  associa- 
tion who  shall  make  any  such  loan  shall  be  liable  for  a 
farther  sum  equal  to  one  quarter  of  the  money  loaned; 
and  any  fine  or  penalty  incurred  by  a  violation  of  this 
section  shall  be  recoverable  for  the  benefit  of  the  party 
bringing  such  suit. 

(Sec.  5209.)  Every  president,  director,  cashier,  teller, 
clerk,  or  agent  of  any  association,  who  embezzles,  ab- 
stracts, or  willfully  misapplies  any  of  the  moneys,  funds, 
or  credits  of  the  association ;  or  who,  without  authority 
from  the  directors,  issues  or  puts  in  circulation  any  of  the 
notes  of  the  association;  or  who,  without  such  authority, 
issues  or  puts  forth  any  certificate  of  deposit,  draws  any 
order  or  bill  of  exchange,  makes  any  acceptance,  assigns 
any  note,  bond,  draft,  bill  of  exchange,  mortgage,  judg- 
ment, or  decree;  or  who  makes  any  false  entry  in  any 
book,  report,  or  statement  of  the  association,  with  intent, 
in  either  case,  to  injure  or  defraud  the  association  or  any 
other  company,  body  politic  or  corporate,  or  any  individual 
person,  or  to  deceive  any  officer  of  the  association,  or  any 
agent  appointed  to  examine  the  affairs  of  any  such  asso- 
ciation; and  every  person  who  with  like  intent  aids  or 
abets  any  officer,  clerk,  or  agent  in  any  violation  of  this 
section,  shall  be  deemed  guilty  of  a  misdemeanor,  and 
shall  be  imprisoned  not  less  than  five  years  nor  more 
than  ten. 


Penalty 
for  offering 
or  receiving 
United 
States  or 
national- 
bank  notes 
as  security 
for  loan, etc 


Penalty 
for  embez- 
zlement. 


250 


HAND-BOOK   OF   FINANCE. 


Obligations 
or  other 
securities 
of  the 
United 
States 
defined. 
Act  of 
Feb.  18, 
1875.  cor- 
recting 
Kev.  Stat. 


Penalty 
for  counter- 
feiting na- 
tional-bank 
notes. 


Penalty  for 

using 

plates 

to  print 

notes 

without 

authority. 


Engraving 
false  plate. 


(Sec.  5413.)  The  words  "  obligation  or  other  security 
of  the  United  States  "  shall  be  held  to  mean  all  bonds, 
certificates  of  indebtedness,  national-bank  currency,  cou- 
pons, United  States  notes,  treasury  notes,  fractional 
notes,  certificates  of  deposit,  bills,  checks  or  drafts  for 
money,  drawn  by  or  upon  authorized  officers  of  the 
United  States,  stamps  and  other  representatives  of  value, 
of  whatever  denomination,  which  have  been  or  may  [be] 
issued  under  any  act  of  Congress . 

(Sec.  5415.)  Every  person  who  falsely  makes,  forges, 
or  counterfeits,  or  causes  or  procures  to  be  made,  forged 
or  counterfeited,  or  willingly  aids  or  assists  in  falsely 
making,  forging,  or  counterfeiting,  any  note  in  imitation 
of,  or  purporting  to  be  in  imitation  of,  the  circulating 
notes,  issued  by  any  banking  association  now  or  hereafter 
authorized  and  acting  under  the  laws  of  the  United 
States;  or  who  passes,  utters,  or  publishes,  or  attempts 
to  pass,  utter,  or  publish,  any  false,  forged,  or  counter- 
feited note,  purporting  to  be  issued  by  any  such  association 
doing  a  banking  business,  knowing  the  same  to  be  falsely 
made,  forged,  or  counterfeited,  or  who  falsely  alters,  or 
causes  or  procures  to  be  falsely  altered,  or  willingly  aids 
or  assists  in  falsely  altering  any  such  circulating  notes,  or 
passes,  utters,  or  publishes,  or  attempts  to  pass,  utter,  or 
publish  as  true,  any  falsely  altered  or  spurious  circulating 
note  issued,  or  purporting  to  have  been  issued,  by  any 
such  banking  association,  knowing  the  same  to  be  falsely 
altered  or  spurious,  shall  be  imprisoned  at  hard  labor  not 
less  than  five  years  nor  more  than  fifteen  years,  and  fined 
not  more  than  one  thousand  dollars. 

(Sec.  5430.)  Every  person  having  control,  custody,  or 
possession  of  any  plate,  or  any  part  thereof,  from  which 
has  been  printed,  or  which  may  be  prepared  by  direction 
of  the  Secretary  of  the  Treasury  for  the  purpose  of  print- 
ing, any  obligation  or  other  security  of  the  United  States, 
who  uses  such  plate,  or  knowingly  suffers  the  same  to  be 
used  for  the  purpose  of  printing  any  such  or  similar  obli- 
gation, or  other  security,  or  any  part  thereof,  except  as 
may  be  printed  for  the  use  of  the  United  States  by  order 
of  the  proper  officer  thereof;  and  every  person  who  en- 
graves, or  causes  or  procures  to  be  engraved,  or  assists  in 


NATIONAL    BANKS    AND    BANK    CURRENCY. 


251 


engraving,  any  plate  in  the  likeness  of  any  plate  designed 
for  the  printing  of  such  obligation  or  other  security,  or 
who  sells  any  such  plate,  or  who  brings  into  the  United 
States  from  any  foreign  place  any  such  plate,  except 
under  the  direction  of  the  Secretary  of  the  Treasury  or 
other  proper  officer,  or  with  any  other  intent,  in  either 
case,  than  that  such  plate  be  used  for  the  printing  of  the 
obligations  or  other  securities  of  the  United  States;  or 
who  has  in  his  control,  custody,  or  possession  any  metal- 
lic plate  engraved  after  the  similitude  of  any  plate  from 
which  any  such  obligation  or  other  security  has  been 
printed,  with  intent  to  use  such  plate,  or  suffer  the  same 
to  be  used  in  forging  or  counterfeiting  any  such  obliga- 
tion or  other  security,  or  any  part  thereof;  or  who  has  in 
his  possession  or  custody,  except  under  authority  from 
the  Secretary  of  the  Treasury  or  other  proper  officer,  any 
obligation  or  other  security,  engraved  and  printed  after 
the  similitude  of  any  obligation  or  other  security  issued 
under  the  authority  of  the  United  States  with  intent  to 
sell  or  otherwise  use  the  same;  and  every  person  who 
prints,  photographs,  or  in  any  other  manner  makes  or 
executes,  or  causes  to  be  printed,  photographed,  made, 
or  executed,  or  aids  in  printing,  photographing,  making, 
or  executing  any  engraving,  photograph,  print,  or  im- 
pression in  the  likeness  of  any  such  obligation  or  other 
security,  or  any  part  thereof,  or  who  sells  any  such  en- 
graving, photograph,  print,  or  impression,  except  to  the 
United  States,  or  who  brings  into  the  United  States 
from  any  foreign  place  any  such  engraving,  photograph, 
print  or  impression,  except  by  direction  of  some  proper 
officer  of  the  United  States,  or  who  has  or  retains  in  his 
control  or  possession,  after  a  distinctive  paper  has  been 
adopted  by  the  Secretary  of  the  Treasury  for  the  obliga- 
tions and  other  securities  of  the  United  States,  any  similar 
paper  adapted  to  the  making  of  any  such  obligation  or 
other  security,  except  under  the  authority  of  the  Secretary 
of  the  Treasury  or  some  other  proper  officer  of  the  United 
States,  shall  be  punished  by  a  fine  of  not  more  than  five 
thousand  dollars,  or  by  imprisonment  at  hard  labor  not 
more  than  fifteen  years,  or  by  both. 


Having  in 
possession 
false  plate. 


Having  in 
possession 
spurious 
national- 
bank  notes. 


Printing  or 
photo- 
graphing 
notes,  etc. 


Bringing 
into  the 
United 
States 
photo- 
graphed 
note?,  etc. 
Having  in 
possession 
distinctive 
bank-note 
paper. 


252 


HAND-BOOK    OF    FINANCE. 


Penalty 
for  passing, 
selling,etc, 
counterfeit 
or  altered 
notes. 


Penalty  for 
taking 
impression 
of  tools, 
imple- 
ments, etc. 


Penalty  for 
having  in 
possession 
impression 
of  tools, 
imple- 
ments, etc. 


Penalty  for 
buying, 
selling  or 
dealing  in 


(Sec.  5431.)  Every  person  who,  with  intent  to  defraud, 
passes,  utters,  publishes,  or  sells,  or  attempts  to  pass, 
utter,  publish,  or  sell,  or  brings  into  the  United  States 
with  intent  to  pass,  publish,  utter,  or  sell,  or  keeps  in 
possession  or  conceals  with  like  intent  any  falsely  made, 
forged,  counterfeited,  or  altered  obligation,  or  other  se- 
curity of  the  United  States,  shall  be  punished  by  a  fine 
of  not  more  than  five  thousand  dollars,  and  by  imprison- 
ment at  hard  labor  not  more  than  fifteen  years. 

(Sec.  5432.)  Every  person  who,  without  authority 
from  the  United  States,  takes,  procures,  or  makes,  upon 
lead,  foil,  wax,  plaster,  paper,  or  any  other  substance  or 
material,  an  impression,  stamp,  or  imprint  of,  from,  or 
by  the  use  of  any  bed-plate,  bed-piece,  die,  roll,  plate, 
seal,  type,  or  other  tool,  implement,  instrument,  or  thing 
used  or  fitted  or  intended  to  be  used,  in  printing,  stamp- 
ing, or  impressing,  or  in  making  other  tools,  implements, 
instruments,  or  things,  to  be  used,  or  fitted  or  intended 
to  be  used,  in  printing,  stamping,  or  impressing  any 
kind  or  description  of  obligation  or  other  security  of  the 
United  States,  now  authorized  or  hereafter  to  be  author- 
ized by  the  United  States,  or  circulating  note  or  evidence 
of  debt  of  any  banking  association  under  the  laws  thereof, 
shall  be  punished  by  imprisonment  at  hard  labor  not 
more  than  ten  years,  or  by  a  fine  of  not  more  than  five 
thousand  dollars,  or  both. 

(Sec.  5433. )  Every  person  who,  with  intent  to  defraud, 
has  in  his  possession,  keeping,  custody  or  control,  with- 
out authority  from  the  United  States,  any  imprint,  stamp, 
or  impression,  taken  or  made  upon  any  substance  or  ma- 
terial whatsoever,  of  a,ny  tool,  implement,  instrument, 
or  thing,  used,  or  fitted  or  intended  to  be  used,  for  any 
of  the  purposes  mentioned  in  the  preceding  section;  or 
who,  with  intent  to  defraud,  sells,  gives  or  delivers  any 
such  imprint,  stamp,  or  impression  to  any  other  person, 
shall  be  punished  by  imprisonment  at  hard  labor  not 
more  than  ten  years,  or  by  a  fine  of  not  more  than  five 
thousand  dollars. 

(Sec.  5434.)  Every  person  who  buys,  sells,  exchanges, 
transfers,  receives,  or  delivers,  any  false,  forged,  coun- 
terfeited, or  altered  obligation  or  other  security  of  the 


NATIONAL   BANKS   AND   BANK    CURRENCY.         253 

United  States,  or  circulating-  note  of  any  banking  associ-  forged  or 
ation  organized  or  acting  under  the  laws  thereof,  which  notes, 
has  been  or  may  hereafter  be  issued  by  virtue  of  any  act 
of  Congress,  with  the  intent  that  the  same  be  passed, 
published,  or  used  as  true  and  genuine,  shall  be  impris- 
oned at  hard  labor  not  more  than  ten  years,  or  fined  not 
more  than  five  thousand  dollars,  or  both. 

(Sec.  5437.)  In  all  cases  where  the  charter  of  any  cor-    Penalty  for 
poration  which  has  been  or  may  be  created  by  act  of  JJSttingfa/ 
Congress  has  expired  or  may  hereafter  expire,  if  any   tj^notes11 
director,    officer,  or   agent  of  the   corporation,  or  any    drafts,  etc., 
trustee  thereof,  or  any  agent  of  such  trustee,  or  any  per-    associa- 
son  having  in  his  possession  or  under  his  control  the    tion8- 
property  of  the  corporation  for  the  purpose  of  paying  or 
redeeming  its  notes  and  obligations,  knowingly  issues, 
re-issues,  or  utters  as  money,  or  in  any  other  way  know- 
ingly puts  in  circulation  any  bill,  note,  check,  draft,  or 
other  security  purporting  to  have  been  made  by  any  such 
corporation  whose  charter  has  expired,  or  by  any  officer 
thereof,  or  purporting  to  have  been  made  under  author- 
ity derived  therefrom,  or  if  any  person  knowingly  aids  in 
any  such  act,  he  shall  be  punished  by  a  fine  of  not  more 
than  ten  thousand  dollars,  or  by  imprisonment  not  less 
than  one  year  nor  more  than  five  years,  or  by  both  such 
fine  and  imprisonment.    But  nothing  herein  shall  be   Persons  not 
construed  to  make  it  unlawful  for  any  person,  not  being   agents  of 
such  director,  officer,  or  agent  of  the  corporation,  or  any 
trustee  thereof,  or  any  agent  of  such  trustee,  or  any  per-    may 
son  having  in  his  possession  or  under  his  control  the 
property  of  the  corporation  for  the  purpose  hereinbefore 
set  forth,  who  has  received  or  may  hereafter  receive  such 
bill,  note,  check,  draft,  or  other  security,  bona  fide  and 
in  the  ordinary  transactions  of  business,  to  utter  as 
money  or  otherwise  circulate  the  same. 


closed  asso- 
ciations 


circulate 
the  notes  uf 
such  aseo 
ciations. 


254 


HAND-BOOK    OF   FINANCE. 


THE  INTEREST  LAWS  OF  THE  STATES. 
[Compiled  from  the  Banker's  Almanac  and  Register  for  1875.] 
See  page  225  for  penalty  for  usury  by  national  banks. 
Bate  per  cent. 

State.  Legal.    Special.  Penalty  of  Usury. 

1  Alabama 8. .  — . .  Loss  of  interest. 

2  Arizona 10..     §..None. 

3  Arkansas 6. .     §. .  None. 

4  California 10. .     §. .  None. 

5  Colorado 10. .     §. .  None. 

6  Connecticut 7 . .     § . .  Forfeiture  of  all  interest. 

7  Dacotah 7 . .  18 . .  Forfeiture  of  contract. 

8  Delaware 6 . .     6 . .  Forfeiture  of  contract. 

9  Dist.  of  Columbia.     6. .  10. .  Forfeiture  of  all  interest. 

10  Florida 8..  §..  None. 

11  Georgia 7..  7..  None. 

12  Idaho *10. .  24. .  $300,  or  imprisont  6  mos.  or  both. 

13  Illinois 6..  10..  Forfeiture  of  all  the  interest. 

14  Indiana 6. .  10. .  Forfeiture  of  interest  and  costs. 

15  Iowa 6. .  10. .  Forfeiture  of  excess. 

16  Kansas 7. .  12. .  Forfeiture  of  excess  over  12  per  ct. 

17  Kentucky 6. .  10. .  Forfeiture  of  all  the  interest. 

18  Louisiana 5 . .  8 . .  Forfeiture  of  interest. 

19  Maine 6 . .  § . .  Forfeiture  of  excess. 

20  Maryland 6. .  6. .  Forfeiture  of  excess. 

21  Massachusetts 6..  §..  None.     (6  per  cent  on  judgments.) 

22  Michigan 7. .  10. .  Forfeiture  of  excess. 

23  Minnesota 7 . .  12 . .  Forfeiture  of  excess  over  7  per  cent. 

24  Mississippi 6. .  §. .  None. 

25  Missouri 6. .  10. .  Forfeiture  of  all  interest. 

26  Montana 10. .  — . .  None. 

27  Nebraska 10. .  12. .  Forfeiture  of  all  interest,  and  costs. 

28  Nevada 10.  §. .  None. 

29  New  Hampshire. .  6. .  6. .  Forf.  of  3  times  the  interest  rec'd. 

30  New  Jersey 7 . .  7 . .  Forfeiture  of  all  interest. 

31  New  Mexico 6..  12..  None. 

32  New  York *7 . .  7 . .  Forfeiture  of  contract. 

33  North  Carolina. . .  6..  8..  Forfeiture  of  interest. 


THE    INTEREST   LAWS    OF   THE    STATES. 


255 


Rate  per  cent. 
State.  Legal.    Special.  Penalty  of  Usury. 

34  Ohio 6 . .     8 . .  Forfeiture  of  excess. 

35  Oregon 10. .  12. .  Forf.  of  inter 't,  principal  and  costs. 

36  Pennsylvania 6. .     6. .  Forf.  of  excess.     Act  May  28,1858. 

nm  n.     _    T  ,      ,  j,a        a      Forfeiture,  unless  a  greater  rate  is 

37  Rhode  Island f6 . .     § . .      contracted. 

38  South  Carolina  ...     7. .     §. .  None. 

„,  _  a      in      Forfeiture  of  excess  over  6  per  cent, 

39  Tennessee 6. .  10. .       and  $100  ^ 

40  Texas 8..  §..  None. 

41  Utah 10..  §••  None. 

42  Vermont ' 6: .  J7. .  Forfeiture  of  excess. 

43  Virginia 6..  12..  Forfeiture  of  contract. 

44  Washington  Terr.  10..  §..  None. 

45  West  Virginia 6 . .  6. .  Forfeiture  of  excess. 

46  Wisconsin 7 . .  10. .  Forfeiture  of  all  the  interest. 

47  Wyoming 10. .     §. .  None. 

*  Usurers  liable  to  arrest  for  misdemeanor.  %  On  railroad  bonds  only. 

t  Rate  on  judgments  unless  otherwise  expressed.       §  No  limit. 


256 


HAND-BOOK    OF   FINANCE. 


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GOLD    VALUES    OF    U.    S.    XOTES. 


257 


TABLE  No.  2.— RELATIVE  VALUES  OF  GOLD  AND  UNITED 
STATES  NOTES. 


Showing  the  gold  value  of  United  States  notes  with  gold  at  any  price 

not  exceeding  285*  in  currency . 


Pre-  Gold    Pre- 
mium Value  mium 

on  Legal      on 

Gold.  T'rs.    Gold. 


Gold 
Value 
Legal 

T'rs. 


1. 
2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 
10. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 
18. 
19. 
20. 
21. 
22. 
23. 
24. 
25. 
26. 
27., 
28. 
29. 
30. 
31. 
32. 
33. 
34. 
35. 
36. 
37. 


.99 

.98 
.97 
M%- 
.9534 
•94% 
93% 
•  92%! 

91M 
.91 

.9014 

.89% 

88%; 

■87%| 

,87 

.86%! 

85%i 

,84% 

,84 

.83%  I 


....80%! 

....so 

....79% 

....78% 

....78% 

....77% 

....77 

.,..76% 

....15% 

....75% 

....74% 

....74% 

....73%, 

. . . .73 


38. 
39. 

40. 
41. 
42. 
43. 
44. 
45. 

46 68% 

47 68 

48 67% 

49 67i;i 

50. 


.72% 

,72 
71V 
71 

.70% 
,70 
69% 
60 


60  % 

66% 

65% 

65% 

65 

64% 

64% 

63 -3 

63^ 

62.% 

62  V 

62% 

61% 

61% 

61 

60% 

60% 

59% 

59  V 

59% 

58% 

58  V 

58% 

57% 

57  v 


Pre-  Goldi  Pre- 
mium Value !  mium 

on  Legal  I    on 

Gold.  T'rs.    Gold. 


Cold  1  Pre-  Gold 

Value  mium  Value 

Legal      on  Legal 

T'rs.     Gold.  T'rs. 


70. 
77. 
78. 
7!). 
so. 
81. 
82. 


84. 


86. 
87. 


.57% 
.56% 
.563| 
.56% 

.55% 

.55  V 


55 


83 54% 

54% 


.54 

.53% 
,53  V 
.53i| 
.53 


...521/ 

...52 

...51% 

...51% 

...5114 

...51 

...50% 

. .  .50% 


89 

90 

91 

92 

93 

94 

95 

96 

97 

98 

99 
100 
101 

102 49 

103 49 

104 49 

105 48 

106. 
107. 
108. 
109. 
110. 
111. 


50 
49% 


48  V 
483  -1 
48 


-i<V 
47 


47V 

4n% 


112 

113 

114 <±u 

115 46)1 

116 46% 

117.:... 46 

118 45% 

119 45% 

120 45% 

121 45% 

122 45 

123 44% 

124 44% 

125 44  V 

126 44% 

127 44 

128 43% 

129 43% 

130 43V 

131 43% 

132 43 

133 42  % 

134 42% 

L35 42% 

136 42% 

137 42% 

138 42 

139 41% 

140 41% 

141 41V 

142 41% 

143 41% 

144 41 

145 40,% 

146 40% 

147 40', 

148 40% 


14!) 
150 
151 
152 
153 
154 
155 
156 
157 
158 
159 
160 
161 
162 
163 
164 
165 
166 
167 
168 
169 
170 
|171 
1 172 
1173 
174 
1175 
176 
177 
178 
17«) 
iso 
1S1 


40% 
.40 


.39% 
.39% 


.39% 

.39 

.38^ 

.38% 

•  38% 
•38% 

•  38% 
.38% 
.38 
.37,% 
.37', 
•37% 
•37% 
■  37% 

58 

■36% 

.36% 

.36% 


•  ••36% 

...36 

...35,% 

...35% 

...35% 

il82 35% 

183 351.; 

184 36M 

185 :55V 


*  According  to  the  officially-published  quotations  of  the  gold  market  in  New 
York,  the  currency  price  of  $100  gold  reached  its  maximum  on  the  11th  day  of 
July,  1864,  the  quotations  for  that '"day  ranging  from  *'??(;  to  $285.  The  average 
price  of  $100  gold  for  the  month  of  July,  1864,  was  $258.10,  and  the  average  price 
of  $100  gold  for  the  quarter- year  ending  September  30,  1864,  was  $244.90. 


11 


258 


HAND-BOOK    OF    FINANCE. 


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VALUES    OF    FOREIGN    COINS. 


259 


TABLES  Nos.  4  and  5. 
Exhibiting  the  values,  in  united  states  money  of  account, 
of  the  pure  gold  or  silver  representing,  respectively, 
the  monetary  units  of  foreign  countries,  and  the  value 
of  the  standard  coins  in  circulation  of  the  various 
nations  of  the  world,  january  1,  1874. 

Treasury  Department,  Washington,  D.  C,  | 
January  1,  187U. 

The  first  section  of  the  act  of  March  3,  1873,  provides  "that 
the  value  of  foreign  coin,  as  expressed  in  the  money  of  account  of 
the  United  States,  shall  be  that  of  the  pure  metal  of  such  coin  of 
standard  value,"  and  that  "the  values  of  the  standard  coins  in  cir- 
culation of  the  various  nations  of  the  world  shall  be  estimated 
annually  by  the  Director  of  the  Mint,  and  be  proclaimed  on  the  first 
day  of  January  by  the  Secretary  of  the  Treasury."  The  following- 
tables  have  been  prepared  and  are  published  in  compliance  with  the 
above  stated  provisions  of  law: 
Table  4. — Values,  in  United  States  money  of  account,  of  the  pure 

gold  or  silver  representing  the  monetary  units,   respectively,   of 

foreign  countries. 


Country. 

Monetary  unit. 

Standard. 

Value    in 

U.S. 
money  of 
account. 

Argentine  Republic 

Peso  fuerte 

Gold 

$1.00.00 

47  GO 

Florin 

Silver 

Gold  and  silver 

Silver 

Gold 

Franc 

19  80 

Dollar 

96  50 

Millreis  of  1,000  reis  . . 
Dollar 

54  56 

Brit'h  Possessions  { 

in  N.  America,  f 

Central  America . . . 

Chili 

Gold 

1  00  00 

Dollar 

Peso 

Silver 

Gold 

.96.50 
91  23 

China 

Tael . . 

Pure  silver.  .  .  . 
Gold 

1.61.00 
92  58 

Cuba 

Peso 

Denmark 

Gold 

Silver 

Silver 

Gold  and  silver 
Gold 

°6  80 

Ecuador  

Dollar 

Dollar  of  20  piasters  . . 
Franc 

96  50 

EfVDt 

1.00.39 
19  30 

France 

Great  Britain 

Pound  sterling 

Drachma 

4  86  65 

Greece 

Silver 

Gold 

19  30 

German  Empire  . . . 
Hayti   

Mark 

23  82 

Dollar 

Silver 

1.00.00 

260 


HAND-BOOK    OF   FINANCE. 


Country. 

Monetary  Unit. 

Standard. 

Value  in 

U.  S. 
money  of 
account. 

Jamaica, 

Pound  sterling 

Yen  ... . 

Gold 

4.86.65 
.99.70 
.45.84 
.19.30 

1  00  00 

Japan  

Gold 

Silver 

Gold  and  silver 
Gold  . . . 

India 

Rupee  of  16  annas 

Italy 

Liberia 

Dollar  ............ .' .' . 

Mexico 

Dollar  . . 

Silver 

Silver 

1.04.75 
40  50 

Netherlands 

Florin 

Norway 

Crown .... 

Peso. 

Gold 

26  80 

Paraguay 

Gold 

1  00  00 

Peru 

Dollar  . . 

Silver 

Gold  . . 

.96.50 
92  58 

Porto  Rico 

Peso 

Portugal 

Millreis  of  1.000  reis  . . 
Roubles  of  100  copecks 
Dollar 

Gold  . . 

1  08  47 

Russia 

Sandwich  Islands. . 

Silver 

Gold 

Gold  and  silver 
Gold  . 

.77.17 
1  00  00 

Spain 

Peseta  of  100  centimes . 
Crown 

.19.30 
26  80 

Sweden    

Switzerland 

Franc. . ." 

Gold  and  silver 

Silver 

Silver.-..    ... 

Gold 

Silver 

Gold 

19  30 

Tripoli 

Mahbub  of  20  piasters . 
Piaster  of  16  caroubs  . . 

Piaster 

Peso 

.87.09 
12  50 

Tunis 

Turkey 

04  39 

U.  S.  of  Colombia. . 

96  50 

Uruguay 

Patacon   

94  98 

Venezuela 

Peso 

Silver 

1 

77  73 

Note.— Where  silver  is  the  legal  standard  and  represents  the  unit  of  account, 
its  value  is  reduced  to  the  hasis  of  gold,  on  the  assumption  that  the  ratio  of  15# 
to  1  represents  the  relative  values  of  silver  and  gold. 

Table  5. — Weight,   fineness  and  value  of  foreign  coins,   as 
determined  by  United  States  mint  assays. 

EXPLANATORY   REMARKS. 

1.  The  weight  is  expressed  in  fractions  of  an  ounce  troy,  agreeing 
with  the  terms  used  in  the  United  States  mints. 

If  it  is  desired  to  have  the  weight  of  any  piece  in  grains,  regard 
the  thousandths  of  an  ounce  as  integers,  take  their  half,  from  which 
deduct  4  per  cent  of  that  half,  and  the  remainder  will  be  grains. 

2.  The  fineness  is  expressed  in  thousandths  parts,  i.e.,  so  many 
parts  of  pure  gold  or  silver  in  1.000  parts  of  the  coin.  The  old  carat 
system  is  generally  abandoned  (except  for  jewelry),  but  it  may  be 
worth  while  to  say  that  41  %  thousandths  equal  one  carat. 

3.  The  valuation  of  gold  is  a  direct  calculation  from  weight  and 


VALUES    OF    FOREIGN    COINS. 


261 


fineness,  at  the  legal  rate  of  25.8  grains,  900  fine,  being  equal  to  $1; 
or  $20,672  (nearly)  per  ounce  of  fine  gold. 

Foreign  coins,  if  converted  into  United  States  coins,  will  be  sub- 
ject to  a  charge  of  one-fifth  of  one  per  cent. 

4.  For  the  silver  there  is  no  fixed  legal  valuation  as  compared 
with  gold.  The  value  of  the  silver  coins  is  computed  at  the  rate  of 
120  cents  per  ounce,  900  fine,  payable  in  subsidiary  silver  coin,  that 
having  been  the  mint  price  when  the  assays  were  made. 

The  gold  value  of  silver  is  to  be  found  in  the  bullion  markets ;  at 
present  it  is  about  113  cents  per  ounce,  900  fine. 

5.  These  tables  generally  give  the  one  principal  coin  of  each 
country,  from  which  the  other  sizes  are  easily  deduced.  Thus,  when 
the  franc  system  is  used,  there  are  generally  gold  pieces  of  40, 10,  20, 
and  5  francs,  all  in  due  proportion.  But  in  silver  the  fractional 
coins  are  very  often  of  less  intrinsic  value  than  the  normal  coin, 
proportionately.    These  are  seldom  exported. 

GOLD   COINS. 


Country. 


Austria 

Do      

Do      

Belgium 

Brazil 

Central  America 

Do 

Chili 

Colombia   and 

S.    America 

generally . . . 

Denmark 

Egypt 

England 

Do        


Denomination. 


Fourfold  ducat 

Souverain  (not  now  c'd) 

4  florins  (new) 

25  francs 

j20rnillreis 

1 2  escudos 

4  reals 

10  pesos  (dollars) 


Old  doubloon* 


Old  10  thaler 

Bedidlik  (100  piasters). 
Pound  or  sov'gnf  (new) 
Pound  average  (worn). 


Weight. 

Fine- 
ness. 

Ounces. 

lOOOths. 

0.448 

986 

0.363 

900 

0.104 

900 

0.254 

899 

0.575 

916.5 

0.209 

853.5 

0.027 

875 

0.492 

898 

0.867 

870 

0.427 

895 

0.275 

875 

0.256.8 

910.5 

0.256.3 

916.5 

Dls.  eta.  ms. 
9  13  2 
6  75  4 
1  93  5 
4    72    0 


10  89  4 

3  68  8 

0  48  8 

9  13  6 

15  50  3 


90  0 

97  4 

86  5 

85  6 


*  The  doubloon  (doblon.  or  more  properly  onza,  though  not  really  an  ounce 
Spanish)  is  now  generally  discontinued.  These  figures  answer  as  well  for  the 
douhloon  of  Peru,  Chili,  Bolivia,  etc.,  and  therefore  this  item  stands  for  all. 
Popayan  pieces  were  rather  inferior. 

t  The  sovereigns  coined  at  Melbourne  and  Sydney,  in  Australia,  and  distin- 
guished only  by  the  mint  marks  M  and  s,  are  the  same  as  those  of  the  London 
mint.     Sovereigns  generally  are  up  to  the  legal  fineness,  91023  (or  22  carats). 


262 


HAND-BOOK    OF    FINANCE. 


Country. 


France 

Germany 

Greece 

India  (British) , 

Italy 

Japan  

Do    

Mexico 

Do      

Do      

Netherlands . . 
New  Granada 

Peru 

Portugal 

Russia 

Spain 

Do 

Do 

Sweden 

Do      

Tunis 

Turkey 


Denomination. 


20  franc  (no  new  issues) 
Old  10  thaler  (Prussian) 

20  drachmas 

Mohur,  or  15  rupees* . . 

20  lire  (francs) 

Cobang  (obsolete) 

New  20  yen 

Old  doubloon  (average) 

20  pesos  (empire) 

20  pesos  (republic),  new 

10  guilders 

10  pesos  (dollars) 

20  soles  

Coroa  (crown) 

5  roubles 

100  reals 

80  reals 

10  escudos 

Ducat 

Carolin  (10  francs) 

25  piasters 

100  piasters 


Weight. 

Fine- 
ness. 

Ounces. 

lOOOths. 

0.207 

899 

0.427 

903 

0.185 

900 

0.375 

916.5 

0.207 

899 

0.289 

572 

1.072 

900 

0.867 

870 

1.086 

875 

1.081 

873 

0.215 

899 

0.525 

891.5 

1.055 

899 

0.308 

912 

0.210 

916 

0.268 

896 

0.215 

869.5 

j  0.270.8 

896 

!   0.111 

975 

!  0.104 

900 

|  0.161 

900 

0.231 

915 

Value  in 

U.  S. 
gold  coin. 


Dls. 
o 


ms. 

7 
1 

9. 


84 
97 
44 

10  5 

84  7 

57  6 

94  4 

59  3 

64  3 


51 
99 
67 
21 
80 
97 
96 
86 
01 
23 


1  93    5 

2  99     5 
4    37    0 


SILVER    COINS. 


Country. 


Denomination. 


Austria Old  rix  dollar 

Do     Old  scudo  (crown) 

Do     Florin,  before  1858. . . . 

Do     New  florin 

Do     New  Union  dollar 

Do     Maria  Theresa  dol. .  1780 

Belgium j5  francs 

Do      !  2  francs 

Bolivia New  dollar 

Brazil Double  millreis 

Canada    20  cents 

Do      25  cents 

Central  America  Dollar 

Chili Old  dollar  


Weight. 


Ounces. 

0.902 

0.836 

0.451 

0.397 

0.596 

0.895 

0.803 

0.320 

0.801 

0.820 

0.150 

0.187.5 

0.866 

0.864 


Fine  ^  alue  m 
ne™  subsidiary 
silver  coin. 


lOOOths. 

833 
902 
833 
900 
900 
838 
897 
835 
900 


Dls. 

1 
1 
0 
0 

0 

1 

0 
0 

0 


918.5  1 
925  0 
925  j  0 
850  !  0 
908  I  1 


cts.  ms. 

00  2 

00  5 

50  1 

47  6 

71  5 

00  0 

96  0 

35  6 
96 
00 
18 
23 


1 
4 
5 
1 

98    1 
04    6 


The  last  coinage  of  mohurs  was  in 


VALUES    OF    FOREIGN"    COINS. 


263 


Country. 


Chili 

China 

Do 

Denmark 

Egypt 

England 

Do        

France 

Do    

N.Germn  States 

Do        Do 
S.German  States 
German  Empire. 

Greece 

Hinclostan 

Italy 

Do 

Japan  


Do 

Do     

Mexico 

Do    

Netherlands 

Norway 

New  Grenada  . . 
Peru 

Do 

Do 

Do 

Portugal 

Romania 

Russia 

Spain 

Do 

Sweden 

Switzerland 

Tunis 

Turkey 


Denomination. 


New  dollar 

Dollar  (English  mint) 

10  cents 

2  rigsdaler 

Piaster  (new) 

Shilling  (new)  ...... 

Shilling  (average)  . . . 
5  franc  (average)  . . . 

2  franc 

Thaler  (before  1857) 

Thaler  (new) , 

Florin 

5  marks  (newj   , 

5  drachmas 

Rupee 

5  lire 

Lira 

Itzebu,  no  longer  coined 

1  yen 

50  sen 

Dollar  (average)  .... 
|  Peso  of  Maximilian  . 

12%  guilders 

Specie  daler 

'Dollar  of  1857 

.Old  dollar 

Dollar  of  1858 

Half  dollar  of  lSSG-^S 

;Sol 

500  reis 

2  lei  (francs),  new  . . 

Rouble 

5  pesetas  (dollar)  . . . 
Peseta  (pistareen) . . . 

Ricksdaler 

2  francs 

5  piasters 

20  piasters 


Weight. 


Fine- 
ness. 


Ounces. 

lOOOths. 

0.801 

900.5 

0.866 

901 

0.087 

901 

0.927 

877 

0.040 

755 

0.182.5 

924.5 

0.178 

925 

0.800 

900 

0.320 

835 

0.712 

750 

0.595 

900 

0.340 

900 

0.804 

900 

0.719 

900 

0.374 

916.5 

0.800 

900 

0.160 

835 

0.279 

890 

0.866.7 

900 

0.402 

800 

0.866 

901 

0.861 

902.5 

0.804 

944 

0.927 

877 

0.803 

896 

0.866 

901 

0.766 

909 

0.433 

650 

0.802 

900 

0.400 

912 

0.322 

835 

0.667 

875 

0.800 

900 

0.160 

835 

0.273 

750 

0.320 

835 

0.511 

898.5 

0.770 

830 

Value  in 
subsidiary 
silver  coin. 


Dls.  cts.  ms. 


96 

04 


0  10 
1 


0 

o 
0 
0  40 


0  90 
0  86 


0  45 

0  96 

0  17 

0  33 


0  96 


61 

85 


08  4 

0  04  0 

0  22  5 

0  21  9 


0  96  0 


35  6 


71  2 

71  4 


o 

•4 
7 
0 
8 
1 
1  04  0 

0  42  8 

1  04  0 
03  6 
01  2 
08  4 


1 
1 
1 

0  96  0 

1  04  3 
0  92  8 
0  37  5 
0  96  0 
0  48  6 
0  35  8 
0  77  8 


0  17  8 
0  27  3 
0  35  6 


WM.  A.  RICHARDSON,  Secretary  of  tlie  Treasury. 


264 


HAND-BOOK    OF    FINANCE. 


TABLE  No.  6. 

Showing  the  values  in  United  States  money  of  the  pure  gold  or  silver 
representing,  respectively,  the  monetary  units  and  standard  coins 
of  foreign  countries,  January  1,  1876. 

Treasuet  Department,  Washington,  D.  C,  January  1, 1876. 
The  estimate  of  values  contained  in  the  following  tahle  has  been  made  by 
the  Director  of  the  Mint,  and  is  hereby  proclaimed  in  compliance  with  the  pro- 
visions of  law. 


Country. 


Austria 

Belgium 

Bolivia 

Brazil  

Brit.  Possessions 
in  N.  America  . 

Bogota 

Central  America. 

Chili 

Denmark 

Ecuador  

Egypt 

France 


Monetary  Unit. 


Florin 
Franc. 


Value  in 
Standard.     U.  S. 
Money. 


Standard  Coins. 


Dollar 

Millreis  of  1,000 reis.. 

jDollar 

Peso 

Dollar 


Silver.... 
!Gold  and 
;  silver  . . 
Gold  and 
silver  . . 
Gold 

Gold 


Gold . . 

Silver . 

Gold . . 


Peso 

Crown Gold 

Dollar Silver . 

Pound  of  100  piasters  Gold. 


Great  Britain 


Greece 

German  Empire 

Japan  

India 


Italy... 
Liberia 
Mexico 


Netherlands 

Norway 

Peru 

Portugal 

Russia 

Sandwich  Islands 


Spain 

Sweden 

Switzerland 


Tripoli. 
Tunis. . 


Turkey , 

United  States  of 
Columbia 


Franc. 


Pound  sterlim 


Drachma 

Mark    

Yen 

Rupee  of  16  annas  . . 

Lira 

Dollar 


Gold  and 
silver  . . 

Gold 

Gold  and 
silver . . 

Gold 

Gold 

Silver 

Gold  and 
silver. . 

Gold 


Dollar Silver 


Florin 

Crown 

Dollar 

Millreis  of  1,000  reis. 
Rouble  of  100  copecks 
Dollar 

Peseta  of  100  centimes 

Crown 

Franc 

Mahbub  of  20  piasters 
Piaster  of  16  caroubs. 

Piaster Gold.. 

Peso Silver. 


Gold  and 
silver  . . 

Gold 

Silver.... 

'Gold 

Silver.... 

|Gold...   . 

Gold  and 
silver  . . 

JGold 

| Gold  and 

I     silver  . . 

Silver 

Silver.... 


.45. 
.19. 

.96. 

.54. 

$1.00 

.96. 
.91. 

.91. 

.26. 

.91 

4.97. 

.19. 
4.86. 

.19. 

.23. 
.99. 
.43. 

.19. 

1.00 

.99. 


.91. 

1.08 
.73. 

1.00 

.19. 


3      Florin. 

3     5,  10  and  20  francs. 

5    [Escudo,   %  bolivar 

J     and  bolivar. 
5     None. 


Dollar. 

Condor,  doubloon 

and  escudo. 
10  and  20  crowns. 
!  Dollar.  (ters 


4     5, 10,  25  and  50  piad- 

3     5,  10  and  20  francs. 

ai/^A  sovereign  and 

'2      sovereign, 
o     15,  10,  20,  50  and  100 

i     drachmas. 
8     5,  10  and  20  marks. 
7     1,2,5, 10  and  20  yen. 

6 

0     5,  10,  20,  50  and  100 
6    I    lire. 


Peso  or  dollar,  5, 10, 
25  and  50  centavo. 

Florin;  in  guldens, 
gold  ($4.01.9). 

10  and  20  crowns. 

2,  5  and  10  millreis. 
K,  y2  and  1  rouble. 

5.  10,  20,  50  and  100 

pesetas. 
10  and  20  crowns. 


5,  10  and  20  francs. 


25,  50,  100,  250  and 
500  piasters. 


B.  H.  BRISTOW,  Secretary  of  the  Treasury. 


TABLE    No.    7.-PRICES    OF  A  DOZEN    ARTICLES    FROM 

1821  TO   1874. 
In  the  New  York  market,  on  the  first  day  of  January  in  each  year. 


at 

Or 
ODrO 

ODJH 

ft  o< 

u 

0 

0^ 

,0 
O 

£ 

0 
0 

ge- 

a 

tJ0M 

is 

i  1* 

1   m  - 

1  <B 

a  0 

u 

CO 

h 

S 

^ 

lfL_ 

cc 

w 

« 

CZ2 

Eh 

'$0~5J 
5C 

s  j  «  ' 

$8  55  SO  12*^ 
6  251   18 

1821 
1822 

$8  62  $13  12 
7  75|  13  00 

'$2  67 
3  25 

$4  12 

7  25 

SO  40 
!   65 

S3  12 
3  00 

SO  22* 
1   20J4 

SO  17% 

14*4 
17*4 
17 

$0  18 
14 

1823 

8  00  12  50 

2  75 

7  75 

72 

2  87 

18*4 

52 

6  12 

1  17 

13 

1824 

8  12  11  87 

2  56 

6  81 

50 

3  87 

13% 

62 

8  6S 

17% 

14*4 
!   15*4 
16% 
12*4 
14% 

13 

1825 

9  25  13  00 

2  87 

5  75 

48 

3  31 

10% 

55 

8  75 

12 

1826 

9  50  12  25 

1  94  5  87 

70 

3  37 

12 

61 

9  37 

18 

12 

1827 

9  12  13  25 

2  35;  5  87 

64 

3  75 

-  9*4 

4fl 

7  10 

14 

U 

1828 

9  87  14  12 

2  87  6  12 

46 

3  19 

8 

47 

9  62 

12% 
12% 
135* 

13 

12 

1829 

10  251  13  25 

2  25  9  00 

55 

3  75 

7 

49 

7  05 

7 

1830 

9  12|  11  75 

2  05  5  37 

47 

2  87 

6* 

42 

7  80 

12 

1831 

8  50 

12  25 

2  37  5  75 

64 

2  62 

7*4 

43 

5  25 

16*4 
15 

24 

1832 

10  25 

13  75 

2  75  6  87 

85 

3  12 

11 

68 

5  15 

10% 
12*4 

15*4 
10*4 
18*4 
19*4 
12 

25 

1833 

10  02 

14  37 

2  56'  6  25 

73 

3  50 

12 

68 

7  25 

13% 
13% 

17 

1834 

10  50 

12  00 

2  25'  5  75 

61 

3  00 

12*4 

60 

5  00 

23 

1835 

10  75'  15  50 

2  12!  5  25 

75 

3  25 

10 

37 

6  37 

14*4 

30 

1836 

10  75;  19  00 

2  57j  7  75 

1  00 

3  25 

H* 

47 

6  95 

13*4 
12 

17 

1837 

14  50  26  75 

3  12  11  25 

1  06 

3  12 

11% 

42 

7  07 

21 

1838 

14  25  20  50 

3  19  9  50 

88 

4  12 

8* 

45 

7  25 

14 

20 

1839 

16  00 

23  50 

3  30  8  69 

92 

4  12 

9% 

38 

5  56 

15% 
14% 
16* 

16 

20 

1840 

12  58 

14  73 

2  37  6  18 

70 

3  62 

10 

57 

6  05 

11% 
10*4 
10 

20 

1841 

10  18 

13  21 

2  62  5  50 

53 

3  62 

9% 

67 

5  87 

20 

1842 

8  25 

9  97 

2  00  6  37 

62 

3  25 

81* 

56 

3  75 

14% 

20 

1843 

6  78 

9  41 

1  75  4  50 

48 

2  87 

5% 

47 

3  90 

12*4 

1* 

9% 

6*4 
8*4 

11*4 
9*4 
7*4 

12% 

15 

20 

1844 

7  00 

10  25  2  oOj  4  75 

53 

2  50 

5% 

47 

3  95 

12*8 

11% 

21 

1815 

7  25 

9  25  2  37  4  75 

49 

3  25 

5% 

55 

4  75 

17 

1846 

8  40 

13  25 

2  62  5  75 

76 

4  75 

6% 

62 

6  40 

17 

1847 

9  00 

10  31 

3  12  5  50 

72 

4  00 

6% 

58 

7  30 

11 

14 

1848 

8  62 

11  75 

3  56  6  50 

76 

3  87 

6& 

58 

4  50 

10*4 

16 

1849 

11  00 

13  75 

2  12  5  50 

64 

3  25 

5*4 

55 

4  00 

9 

13 

1850 

10  00 

10  37 

2  37  5  25 

60 

3  25 

10% 

55 

5  05 

10* 

14 

1851 

10  00 

12  25 

2  62|  5  25 

68 

3  62 

10% 

38 

5  15 

14 

19 

1852 

10  00 

14  75 

2  62;  4  75 

64 

3  50 

8% 

38 

4  55 

11*4 

9* 
11% 
11% 

10% 

14*4 
11% 
10 

18 

1853 

13  25 

20  50 

3  50  6  25 

71 

4  62 

8% 

38 

4  75 

14*4 

21 

1854 

14  25 

16  25 

3  00 

7  62 

78 

4  50 

11% 

38 

4  50 

21 

23 

1855 

15  25 

16  00 

2  75 

9  62 

1  05 

5  62 

9* 

35 

5  35 

19 

20 

1856 

14  25 

18  75 

3  75 

9  50 

95 

5  37 

10% 

35 

7  50 

26 

20 

1857 

15  25 

20  50 

3  25 

7  37 

78 

4  50 

10% 

35 

9  75 

31 

21 

1858 

14  50 

15  62 

3  25 

5  50 

70 

3  75 

9*4 

37 

5  87 

19 

26 

1859 

11  25 

19  00  3  87j  4  62 

85 

3  50 

9*4 

35 

7  12 

25 

12% 

11*4 

22 

1860 

10  75 

16  25;  3  31  5  25 

93 

3  87 

11 

36 

6  87 

24 

28 

1861 

9  00 

16  25:  2  87i  5  50 

80 

3  81 

11 

37 

5  19 

19*4 

13% 
39 

22 

1862 

12  00 

12  25i  2  94  5  47 

72 

7  12 

15*4 

51 

5  50 

19*4 

35 

1863 

12  50 

14  40  3  50,  5  87 

90 

7  25 

27 

67 

6  25 

24*4 

69 

36 

1864 

13  25 

19  37  6  12!  6  30 

1  34 

6  62 

26 

70 

9  00 

28*4 

81 

32 

1865 

20  50 

40  OOj  8  50  9  72 

1  94 

10  75 

38 

72 

14  50 

33 

1  18 

57 

1866 

19  00 

30  75  6  50  7  60 
20  50  5  75  9  42 

1  05 

5  75 

24 

61 

8  25 

17% 

54 

30 

1867 

13  50 

1  18  7  18 

18 

56 

6  50 

22% 

38 

21 

1868 

15  00 

21  20  4  50  8  70 

1  40  9  50 

16 

45 

8  37 

23 

16*4 
27 

22 

1869 

14  00 

27  62  6  25;  5  70 

1  02  8  87 

14 

62 

7  87 

27 

26 

1870 

14  00 

29  75 

6  12!  4  92 

1  08  6  87 

12 

40 

7  75 

25 

26*4 

21 

1871 

12  50 

20  90 

6  00,  5  50 

85'  6  62 

10*4 

39 

7  50 

23 

15% 

23 

1872 

10  00!  14  00 

4  12|  6  00 

i !  8  1 1 

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266 


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POPULATION  OF  THE  GLOBE. 


THE  population  of  various  countries  of  the  globe,  but 
particularly  of  the  countries  of  Europe,  is  a  question 
that  is  constantly  coming  up  in  connection  with  the 
amounts  of  the  precious  metals  available  for  use  as 
money.  In  regard  to  Asia,  containing  more  than  half 
the  entire  population  of  the  world,  there  is  even  yet 
comparatively  little  definite  information,  but  on  the 
whole  the  knowledge  of  the  distribution  of  the  world's 
inhabitants  has  been  greatly  improved  in  the  last  quar- 
ter of  a  century.  Twenty-five  years  ago  the  commonly 
accepted  estimate  was  one  thousand  millions,  but  a 
recent  estimate  by  Dr.  Wagner  (of  which  a  synopsis 
was  printed  in  the  Bankers'  Magazine  for  May,  1875,) 
places  the  estimate  for  the  total  at  1,391,032,000.  The 
population  of  each  of  the  countries  in  the  period  from 
1874  to  1876  may  be  stated  as  in  the  following  table,  in 
which  I  have  also  given  the  populations  of  some  of  the 
most  important  countries  at  various  previous  dates  to 
show  the  increase  —  though  it  is  possible  that  a  part  of 
the  apparent  increase  may  be  due  to  more  accurate 

enumeration. 

Europe. 

Prior  to  1874.  1873-5. 

Russian  Empire,  in  Europe  and 

Asia 65.200,000  (1855)  87.700,000  (1875) 

German  Empire 41,060,695 

France 35,780.000  (1851)  36.102.921 

Austria-Hungary 35,912,755 

Great  Britain  and  Ireland,  in- 
cluding- Gibraltar,  Malta  and 

Heligoland 29.293,300  (1861)  31,977,128 

Italy,  Monaco  and  San  Marino.  21,728,500  (1861)  26,811,584 

Spain 15,464,340  (1857)  16,551 ,647 


POPULATION  OF  THE  GLOBE.  269 

Turkey,  including   Servia,  Ro- 
mania and  Montenegro 15  737  019 

Belgium 4,671,187(1861)      5,087,'l05 

Portugal  and  Azores 4,249,503 

Sweden 4.250,402 

Netherlands 3,674,402 

Switzerland 2,669,147 

Denmark,  with  the  islands  of 

Iceland  and  Faroe 1,864,496 

Norway l',74l]621 

Greece 1,457,849 

Luxemburg 197,528 

Andorra 12,000 

Population   of   Europe  and 
European  islands,  and  Russia  in  Asia 316,500,000 

North  America.  1874-6. 

Greenland 10  500 

Canada  .....    4,000,000  (1875) 

Newfoundland 146  535 

St.  Pierre  and  Miquelon 4383 

United  States  and  Alaska 23,191,876  (1850)    42,000^000  (1875) 

Mexico  (census  1869) 9,000,000(1875) 

Bermudas 12,686 

Total  North  America 56,169,000 

South  America. 

Venezuela 1,400,000 

States  ot  Colombia 2  774  000 

Guiana '282^300 

Brazil 7,677,800  (1850)    10,000,000 

Ecuador 1,300,000 

P8ru. 4,500,000 

V1^  •  •. 2,043.000 

Argentine  Republic 1  812  500 

Uruguay 400,'000 

Patagonia  and  Fireland 24  000 

Paraguay            1,000>00 

h  alkland  Islands 800 

Total  of  South  America 25,500,000 

Central  America. 
Guatemala 1 ,  194,000 

g°.?.d^--- 351.800 

British  Honduras 24  700 

San  Salvador '.'.'.'.'.'.'.  600,'o00 

Nicaragua 250  000 

Costa  Rica 165,000 

ranama ogg  q00 

Total  of  Central  America 2  891  500 


270  HAND-BOOK   OF   FINANCE. 

West  Indies. 

Spanish  possessions,  Havana,  202,488  (census  1867). . . .  2,068,870 

British  possessions 1,042,585 

French  possessions 306,244 

Dutch  possessions 35,482 

Danish  possessions 37,821 

Swedish  possessions 2,898 

Hayti 572,000 

San  Domingo 136,500 

Total  of  West  Indies 4,202,400 

Asia  (exclusive  op  Russia).  1874-6. 

Turkey  in  Asia 13,686,315 

Arabia 3,700,000 

Persia 5,000,000 

Toorkistan,  Toorkomania,  Khokand,  Bokhara  and  Chiva  4,556,000 

Afghanistan,  with  Beluchistan  and  Kalfiristan 5,300,000 

China 425,392,937 

Japan 33,110,503 

Hindoostan,  with  British  Possessions  and  Ceylon 240,112,001 

Burmah,  Siam  and  Cochin-China 25,935,082 

East  India  Islands 30,465,030 


Total  of  Asia  and  Asiatic  islands 787,200,000 

Australia  and  Polynesia. 

Australian  Continent 1,674,500 

Polynesian  Islands 2,763,500 

Population  of  Australia,  etc 4,438,000 

Africa. 

Egypt 8,442,000 

Morocco 6,000,000 

Tunis 2,000,000 

Algiers 2,414,000 

Tripoli,  Barka  and  Fezan 1,150,000 

Sahara 3,700,000 

Abyssinia 3,000,000 

Samauli 8,000,000 

Galla-country  and  country  east  of  White  Nile 15,058,000 

Mohammedan  States  of  Central  Soudan 38,800,000 

West  Soudan,  Upper  Guinea  and  Equatorial  Region. . .  89,100,000 

South  Africa 20,285.000 

Islands . . 5,351,000 


Population  of  Africa 203,300,000 


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GETTING  ON  EN  THE  WORLD  ;  or,  Hints  on  Suc- 
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Contents  :  —  Success  and  Failure  —  Good  and  Bad  Luck—  Choice  0/ a  Pro- 
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Aims  and  Methods  —  Attention  to  Details  —  Practical  Talent  —  Decision- 
Manner  —  Business  Habits  —  Self-Advertising—  The  Will  and  the  Way  — 
Reserved  Power  —  Economy  of  Time  —  Money,  its  Use  and  Abuse  —  Mercantile 
Failures —  Over-Work  and  Under-Rest  —  True  and  False  Success. 

"  A  book  in  the  highest  degree  attractive,  *  *  and  which  will  be  sure  to/ay 
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*  *  There  is  an  earnestness  and  even  eloquence  in  this  volume  which  makes 
the  author  appear  to  speak  to  us  from  the  living  page.  It  reads  like  a  speech. 
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As  a  work  of  art  it  is  a  gem.  As  a  counselor  it  speaks  the  wisdom  cf  the  ages.  As  a 
teacher  it  illustrates  the  true  philosophy  of  life  by  the  experience  of  eminent  men  of 
every  class  and  calling.  It  warns  by  the  story  of  signal  failures,  and  encourages  by 
the  record  of  triumphs  that  seemed  impossible.  It  is  a  book  of  facts  and  not  of 
theories.  The  men  who  have  succeeded  in  life  are  laid  under  tribute,  and  made  to 
divulge  the  secret  of  their  success.  They  give  vastly  more  than  '  hints  ;'  they 
make  a  revelation.  They  show  that  success  lies  not  in  luck,  but  in  pluck. 
Instruction  and  inspiration  are  the  chief  features  of  the  work  which  Prof.  Mathews 
has  done  in  this  volume.1' — Christian  Era,  Boston. 

THE  GREAT  CONVERSERS,  and  Other  Essays- 

By  Wm.  Mathews,  LL.D.,  author  of  "  Getting  On  in  the  World." 

1  volume,  i2mo.,  306  pages,  with  Map,  price $1  75 

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in  this  author's  writings,  and  the  reader  is  continually  reminded  by  their  ease  and 
grace  of  the  elegant  compositions  of  Goldsmith  and  Irving." — Boston  Transcript. 

11  Twenty  essays,  all  treating  lively  and  agreeable  themes,  and  in  the  easy, 
polished  and  sparkling  style  that  has  made  the  author  famous  as  an  essayist.  *  * 
The  most  striking  characteristic  of  Prof.  Mathews'  writing  is  its  wonderful  wealth 
of  illustration.  *  *  One  will  make  the  acquaintance  of  more  authors  in  the 
course  of  a  single  one  of  his  essays  than  are  probably  to  be  met  with  in  the  same 
limited  space  anywhere  else  in  the  whole  realm  of  our  literature." — The  Chicago 
Tribunt. 


PUBLISHED  BY  S.    C.    GXIGGS  &*   CO.,    CHICAGO. 

WORDS;  THEIR  USE  AND  ABUSE,  By  Prof.  Wm.  Mathews, 
Author  of  "Getting  on  in  the  World,"     "The  Great  Conversers,"  Etc., $2  00. 

"A  book  of  rare  interest."— Brooklyn  Eagle. 
"Every  page  sparkles  with  literary  gems."—  The  Interior. 
"An  interesting,  well-written  and  instructive  volume." —Independent^  N.  Y. 
"Every  literary  man  and  woman  should  read  it.'' — Sunday  Times,  N.  Y. 
"A  valuable  companion  for  writers,  talkers  and  people  generally." — Boston 
journal. 

"Although  written  for  popular  reading,  they  are  scholarly  and  instructive,  and 
in  a  very  high  degree  entertaining.  No  one  can  turn  to  a  single  page  of  the  book  with- 
out finding  something  worth  reading  and  worth  remembering.  It  is  a  book  both  for 
'ibraries  and  general  reading,  as  scholars  will  not  disdain  its  many  valuable  illustra- 
ions,  while  the  rising  writer  will  find  in  it  a  perfect  wealth  of  rules  and  suggestions 
to  help  him  form  a  good  style  of  expression." — Publishers'  Weekly,  New  York. 

"To  this  large  class,  (the  great  body  of  our  people  in  every  rank,  occupation 
and  profession)  it  will  prove  a  most  entertaining  recreation  and  useful  study.  Young 
men  in  higher  schools,  academies  and  colleges  will  also  find  it  a  useful  and  helpful 
guide,  which  will  not  only  save  them  from  committing  vulgar  solecisms  and  awkward 
verbal  improprieties,  but  from  contracting  vicious  habits  that  will  stick  to  them,  if 
once  suffered  to  be  formed,  like  the  shirt  of  Nessus." — Christian  Intelligencer , New 
York. 

"The  final  chapter  on  'Common  Improprieties  of  Speech'  should  be  pnnteo.  in 
tract  form.  .  ,  .  We  should  like  to  put  a  copy  of  this  book  into  the  hands  of  every 
man  andivoman  who  is  using  or  intends  to  use,  our  good  old  Anglo-Saxon  with 
voice  or  pen  for  any  public  service.  It  is  a  textbook,  full  of  information,  and  con- 
tains hints,  rules,  criticisms  and  illustrations,  which  authenticate  their  own  value.'' — 
Christian  at  Work,  New  York 


TWO   YEARS    IN    CALIFORNIA,    By  Mary   Cone.     With  15  fine 
engravings,  a  map  of  California,  and  a  plan  of  the  Yosemite  Valley.    Cloth $1.75 

"One  of  the  most  reliable  and  authentic  works  on  California  yet  issued." — Sun- 
day Times,  New  York. 

"One  of  the  best  descriptions  of  the  Golden  State  that  has  met  our  eye,    .    . 
unbiassed,  impartial,  and  intelligent." — Christian  at  Work,  New  York. 

"This  is  a  book  of  absorbing  interest.     .    .    No  description  can  do  justice  to 
it.     Every  page  deserves  to  be  read  and  studied." — Albany  Journal, 

"It  would  be  difficult  to  compress  within  the  same  limits  more  really  valuable 
information  on  the  subject  treated  than  is  here  given." — Morning  Star^  Boston. 

"Will  be  of  much  value  to  every  one  who  contemplates  either  visiting  or  emi- 
garting  to  California." — New  York  Evening  Mail. 


PUBLISHED  BY  S.  C.  GRIGGS  &  CO.,  CHICAGO. 


PRE-HISTOKIC  RACES  OF  THE  UNITED  STATES. 

By  J.  W.  Foster,  LL.D.,  Author  of  "  The  Physical  Geography  of  the  Mississippi 
Valley,"  etc.     415  pages,  crown  8vo,  with  a  large  number  of  illustrations. 

Price,  cloth $3  00 

Half  calf  binding,  gilt  top 5  00 

Full  calf,  gilt  edges 6   50 

"  One  of  the  best  and  clearest  accounts  we  have  seen  of  those  grand  monuments 
of  a  forgotten  race." — London  Saturday  Review. 

"The  reader  will  find  it  more  fascinating  than  his  last  favorite  novel."— 
Eclectic  Magazine,  N.  V. 

11  The  book  is  literally  crowded  with  astonishing  and  valuable  facts." — 
Boston  Post. 

"  It  is  an  elegant  volume  and  a  valuable  contribution  to  the  subject.  *  *  * 
Contains  just  the  kind  of  information  in  clear,  compressed  and  intelligible  form, 
which  is  adapted  to  the  mass  of  readers." — Appleton's  Popular  Science  Monthly. 

"  The  book  is  typographically  perfect,  and  with  its  admirable  illustrations  and 
convenient  index  is  really  elegant  and  a  sort  of  luxury  to  possess  and  read.  *  * 
Dr.  Foster's  style  reminds  us  of  Tyndall  and  Procter,  at  their  best.  *  *  He 
goes  over  the  ground,  inch  by  inch,  and  accumulates  information  of  surprising 
jnterest  and  importance,  bearing  on  this  subject,  which  he  gives  in  his  crowded  but 
most  instructive  and  entertaining  chapters  in  a  thoroughly  scientific  but  equally 
popular  way.  We  have  marked  whole  pages  of  his  book  for  quotation,  and  finally 
from  sheer  necessity  have  been  compelled  to  put  the  whole  volume  in  quotation 
marks,  as  one  of  the  few  books  that  are  indispensable  to  the  student,  and  scarcely 
less  important  for  the  intelligent  reader  to  have  at  hand  for  reference." — Golden 
Age,  Neiv  York. 


A  MANUAL  OF  GESTURE.- With  over  100  Figures, 
embracing  a  complete  system  of  Notation,  with  the  Principles  of  Interpretation 
and  Selections  for  Practice.     By  Prof.  A.  M.  Bacon. 

Price $1  75 

"  Prof.  Bacon  has  given  us  a  work  that,  in  thoroughness  and  practical  value, 
deserves  to  rank  among  the  most  remarkable  books  of  the  season.  There  has  in 
fact,  been  no  work  on  the  subject  yet  offered  to  the  public  which  approaches  it  for 
exhaustivenesG  and  completeness  of  detail.  *  *  It  is  of  the  utmost  value, 
not  merely  to  students,  but  to  lawyers,  clergymen,  teachers,  and  public  speakers, 
and  its  importance  as  an  assistant  in  the  formation  of  a  correct  and  appropriate 
style  of  action  can  hardly  be  over-estimated." — The  Pfi-iladelphia  Inquirer. 

"Prof.  Bacon's  Manual  seems  expressly  arranged  for  the  help  of  those  who 
study  alone  and  have  undertaken  self-instruction  in  the  art  of  persuasive  delivery. 
The  work  in  the  hands  of  our  ministry,  well  studied,  would  have  the  effect  of 
emphasizing  the  living  words  of  the  Gospel  all  over  the  land,  and  making  them 
two-edged  with  meaning." — The  Chicago  Pulpit. 


JrU BUSHED  BY  S.  C.  GRIGGS  &  CO.,  CHICAGO. 
ANDERSON'S  NORSE  MYTHOLOGY;  or  The  Religion 

Of  OUT  F© »*ef at herSo- Containing  all  the  Myths  of  the  Eddas  carefully- 
systematized  and  interpreted,  with  an  Introduction,  Vocabulary  and  Index. — By 
R.  B.  Anderson,  A.  M.,  Professor  of  Scandinavian  Languages,  in  the  University 

of  Wisconsin.     Crown  8vo,  cloth,  $2  50  ;  full  gilt,  $3  00  ;  half  caif,  $5  00. 

"Professor  Anderson  has  produced  a  monograph  which  may  be  regarded  as 
exhaustive  in  all  its  relations." — The  New  York  Tribune. 

"A  masterly  work.  .  .  No  American  book  of  recent  years  does  equal  credit 
to  American  scholarship,  or  is  deserving  of  a  more  pronounced  success." — Boston 
Globe. 

"I  have  been  struck  with  the  warm  glow  of  enthusiasm  pervading  it,  and  with 
the  attractiveness  of  its  descriptions  and  discussions.  I  sincerely  wish  it  a  wide 
circulation  and  careful  study." — William  D  wight  Whitney,  Professor  of  Sanscrit 
and  Comparative  Philology,  Yale  College. 

"I  like  it  decidedly.  A  mythologist  must  be  not  only  a  scholar  but  a  bit  of  a 
poet,  otherwise  he  will  never  understand  that  petrified  poetry  out  of  which  the 
mythology  of  every  nation  is  built  up.  You  seem  to  me  to  have  that  gift  of  poetic 
divination,  and,  therefore,  whenever  I  approach  the  dark  runes  of  the  Edda,  I  shall 
gladly  avail  myself  of  your  help  and  guidance." 

Yours  truly,  F.  Max  Muller,  University  of  Oxford. 

"We  have  never  seen  so  complete  a  view  of  the  religion  of  the  Norsemen. 
The  Myths  which  Prof.  Anderson  has  translated  for  us  are  characterized  by  a  wild 
poetry  and  by  suggestions  of  strong  thought.  We  see  images  of  singular  beauty 
in  the  landscape  of  ice  and  snow.  Sparks  of  fire  are  often  struck  out  from  these 
verses  of  flint  and  steel."—  Bibliotheca  Sacra. 

"Professor  Anderson  is  an  enthusiastic  as  well  as  an  able  scholar;  and  he 
imparts  his  enthusiasm  to  his  readers.  His  volume  is  deeply  interesting  as  well  as 
in  a  high  degree  instructive.  No  such  account  of  the  old  Scandinavian  Mythology 
has  hitherto  been  given  in  the  English  language.  It  is  full,  and  elucidates  the 
subject  in  all  points  of  view.  It  contains  abundant  illustrations  in  literal  and 
poetic  translations  from  the  Eddas  and  Sagas.  .  .  Professor  Anderson's  inter- 
pretations of  the  myths  throw  new  light  upon  them,  and  are  valuable  additions  (as  is 
the  whole  work)  to  the  history  of  religion  and  of  literature.  .  .  It  deserves  to 
be  welcomed,  not  only  as  most  creditable  to  American  scholarship,  but  also  as  an 
indication  of  the  literary  enterprise  which  is  surely  growing  up  in  our  North-western 
States." — The  Presbyterian  Quarterly  and  Princeton  Review. 


AMERICA   NOT    DISCOVERED    BY    COLUMSUS.-A 

Historical  Sketch  of  the  Discovery  of  America  by  the  Norsemen  in  the  10th  cent- 
ury. By  Prof.  R.  B.  Anderson,  of  the  University  of  Wisconsin,  with  an  Appendix 
on  the  Historical,  Literary  and  Scientific  value  of  the  Scandinavian  Languages. 

Price,  12mo,  cloth $1  00 

"A  valuable  addition  to  American  history.  The  object  is  fully  described  in  its 
tide  page,  and  the  author's  narrative  is  very  remarkable.  *  *  *  The  book  is 
full  of  surprising  statements,  and  will  be  read  with  sometbing  like  wonderment."— 
Notes  and  Queries,  London. 


PUBLISHED  BY  S.   C.   GRIGGS  &  CO.,  CHICAGO. 

ViKINC  TALES  OF  THE  NORTH.-The  Sagas  of  Thorstein,  Vik- 
ing's  Son,  and  Fridthjof  the  Bold.  Translated  from  the  Icelandic  by  Prof.  R.  B. 
Anderson,  Author  of  "Norse  Mythology,"  and  Jon  Bjarnason.  Also,  Stephens's 
translation  of  Tegner's  "Fridthjof's  Saga."  Complete  in  one  volume,  12mo, 
Cloth,  S2.00. 

"A  charming  book  it  is.  Your  work  is  in  every-way  cleverly  done.  *  * 
The  quaintly,  delightful  sagas  ought  to  charm  many  thousands  of  readers,  and  your 
translation  is  of  the  best."— IVi I  lard  Fiske,  M.  A.,  Ph.  D.,  Prof,  of  the  North 
European  Languages,  Cornell  University. 

"This  work,  as  a  whole,  will  please  and  instruct  all  classes  of  readers,  and  espe- 
cially those  who  wish  to  search  out  the  antiquities  of  Scandinavian  literature.  But 
every  one  will  be  struck  with  the  majesty  and  force  of  that  old  poetry  of  the  north." 
—  The  Churchman,  New  York. 

"The  literal  translations  of  Anderson  and  Bjarnason  are  full  of  interest  of  a  rare 
kind.  *  *  Whoever  fails  to  read  them,  will  lose  a  rare  fund  of  that  peculiar  wealth 
of  thought  and  feeling  which  is  suggested  by  the  earlier,  simpler  life  of  mankind."— 
The  Christian  Union,  New  York. 

"Prof.  Anderson's  book  is  a  very  valuable  and  important  one.  The  'Saga  of 
Thorstein,  Viking's  Son,'  *  *  teems  with  magnificently  dramatic  situations,  the 
impressiveness  of  which  are  rather  increased  by  the  calm  directness  and  dignity  with 
which  they  are  related.  And  these  features  are  as  characteristic  of  the  English  ver- 
sion as  of  the  Icelandic  originals.  The  translator  shows  an  intimate  acquaintance 
with  all  the  intricacies  of  that  cruelly  inflected  language,  and  an  enthusiastic  appre- 
ciation of  its  epigrammatic  pith  and  vigor.  *  *  Tegner's  celebrated  poem  'Fridth- 
jof s  Saga,'  is  sufficiently  novel  in  its  theme  and  abounding  in  melody  and  rhythm 
to  yield  a  large  measure  of  enjoyment."—  The  Nation,  New  York. 


FRIDTHJOF'S  SAQA.— A  Norse  Romance.  By  Esaias  Tegner 
Translated  from  the  Swedish  by  Thos.  A.  E.  Holcomb  and  Martha  A.  Lyon 
Holcomb.     One  volume,  12mo,  Cloth,  SI. 50. 

"Its  beauties  are  innumerable.  The  grand  old  Viking  spirit  glows  in  every  line." 
—  Christian  Leader,  N.  Y. 

" 'Fridthjof's  Saga'  so  beautifully  embalmed  in  English  verse,  must  become  a 
household  treasure  among  lovers  of  elegant  and  curious  literature." — St.  Louis 
Tunes. 

"No  one  can  peruse  this  noble  poem  without  arising  therefrom  with  a  lofcier  idea 
of  human  bravery  and  a  better  conception  of  human  love." — Inter-Ocean,  Chicago. 

"Wherever  one  opens  the  poem  he  is  sure  to  light  upon  passages  of  exquisite 
beauty.  Longfellow  styles  it  the  noblest  poetic  contribution  which  Sweden  has  yet 
made  to  the  literary  history  of  the  world." — Church  fournal,  New  York. 

"  'FridthjoPs  Saga'  is  an  interesting  story,  told  with  great  skill,  tenderness  and 
picturesque  language,  while  the  characters  are  discriminated  with  a  talent  worthy 
of  the  most  observant  student  of  human  nature.  *  *  *  Sweden  in  the  person  of 
Bishop  Tegner,  offers  the  true  poet,  who,  in  describing  the  struggles  of  souls,  has 
produced  an  immortal  poem.  *  *  The  Holcomb  translation  is  so  well  done  that 
it  would  be  difficult  to  better  it  in  any  single  respect." — Boston  Gazette. 


PUBLISHED  BY  S.  C.  GRIGGS  &>  CO.,  CHICAGO. 

THE  PILOT  AND  HIS  WIFE. -By  Jonas  Lib.  Translated  from 
the  Norse  by  Mrs.  Ole  Bull.     ISmo,  Cloth.     $1.50. 

"The  book  abounds  in  a  rare  poetic  force." — The  Nation. 

"Lie  is  a  novelist  of  very  marked  genius." — North  American  Review. 

"It  opens  to  English  readers  new  and  vivid  fields  of  romance." — Hartford  Post. 

"It  fascinates  the  attention  and  moves  the  feelings  with  a  strange  power,  and 
when  the  book  is  finished  it  is  easy  to  realize  that  we  have  been  under  the  spell  of  a 
master." — Appleton'  s  Journal. 

"In  manner,  plot  and  treatment,  it  is  so  totally  different  from  all  other  writings 
as  to  excite  the  liveliest  interest.  *  *  Lie  is  a  writer  of  marked  peculiarities  and 
rare  genius.  His  dramatic  powers  are  intense,  but  his  presentations  of  the  passions 
and  inspirations,  the  workings  of  heart,  and  the  struggles  of  soul,  are  more  vivid  and 
striking  still.  *  *  The  beauty  and  poetry  of  the  novel  is  found  in  the  literary 
workmanship  which  gives  us  the  character  of  'Elizabeth.'  It  is  essentially  an  orig- 
inal character,  and  a  pure  and  noble  conception." — Sacramento  Daily  Union. 

"It  is  a  remarkably  attractive  book.  *  *  Some  of  the  characters  are  exqui- 
sitely drawn,  notably  those  of  the  pilot  and  his  wife  Elizabeth.  The  latter  is  a 
delightful  creature.  The  reader  cannot  but  be  struck  by  the  intense  power  with 
which  the  author  manages  the  pathetic  incidents  of  his  story,  and  with  the  natural- 
ness that  pervades  the  whole.  The  artistic  workmanship  will  strike  every  person  of 
thought  and  culture,  while  the  vivid  descriptions  in  the  more  excicing  portions  will 
fully  absorb  the  attention  of  those  who  read  only  for  amusement.  There  is  a  fresh- 
ness and  originality  in  the  book,  an  out-door  flavor  and  breeziness,  that  cannot  fail 
to  win  for  it  a  high  degree  of  favor." — Boston  Gazette. 


PETERSON'S     NORWEGIAN  -  DANISH     GRAMMAR 

AMD  READER.— With  a  Vocabulary,  designed  for  American  Students  of  the 
Norwegian-Danish  Language.  By  Rev.  C.  I.  P.  Peterson,  Professor  of  Scandina- 
vian Literature.    12mo,  Cloth.    $1.25. 

"I  may  say  that  I  have  myself  read  through  the  Norwegian-Danish  Grammar 
of  Peterson,  and  when  I  affiru,  that  I  find  myself  able  to  translate  the  reading  exer- 
cises with  great  readiness,  it  may  be  inferred  how  well  the  book  is  adapted  to  for- 
ward one  in  a  knowledge  of  this  interesting  but  neglected  language." — A.  JVinchell, 
LL.D.  Professor  in  Vanderbilt  University,  late  Chancellor  of  the  University  oj 
Syracuse. 

"I  rejoice  to  see  the  door  opened  to  American  Students  to  the  treasures  of  Nor- 
wegian letters,  and  in  so  attractive  a  manner  as  in  Mr.  Peterson's  work.  No  more 
useful  direction  for  philological  study  opens  to  English  scholars  now  than  the  re- 
search into  Anglo-Saxon  and  Norse  Northern  tongues.  This  work  will  be  surely  a 
valuable  help  in  this  direction." — Prof.  Frank  Sewell,  President  of  Urbana  UnU 
versity. 


PUBLISHED  BY  S.   C.    GRIGGS  &*  CO.,   CHICAGO. 

ROBERT'S  RULES  OF  ORDER,  For  Deliberative  Assemblies.— 
By  Major  H.  M.  Robert,  Corps  of  Engineers,  U.  S.  A.    Pocket  size,  cloth,  75  cents. 

This  book  is  far  superior  to  any  other  parliamentary  manual  in  the  English 
language.  It  gives  in  the  simplest  form  possible  all  the  various  rules  or  points  of 
law  or  order  that  can  arise  in  the  deliberations  of  any  lodge,  grange,  debating 
club,  literary  society,  convention,  or  other  organized  body,  and  every  rule  is  com- 
plete in  itself,  and  as  easily  found  as  a  word  in  a  dictionary.  Its  crowning  excel- 
lence is  a  "  Table  of  Rules  relating  to  Motions,"  on  two  opposite  pages  which 
contains  the  answers  to  more  than  two  hundred  questions  on  parliamentary  law, 
fcdiich  will  be  of  the  greatest  value  to  every  member  of  an  assembly. 

"  It  should  be  studied  by  all  who  wish  to  become  familiar  with  the  correct 
%sages  of  public  meetings."— i?.  O.  Haven,  D.  D.,  Chancellor  of  Syracuse  Uni~ 
Versity. 

"  It  seems  much  better  adapted  to  the  use  of  societies  and  assemblies  than 
liiher  Jefferson's  Manual  or  Cushing's."— J.  M.  Gregory,  LL.  D.,  late  President 
■of  the  Illinois  Industrial  University. 

"  I  shall  be  very  glad  to  see  your  Manual  brought  into  general  use,  as  I  am 
sure  it  must  be,  when  its  great  merit  and  utility  become  generally  known.— Hon.  '1 
M.  Cooley,  LL.  D.,  author  of  *  Cooley's  Blackstone,'  "  etc. 

"  After  carefully  examining  it  and  comparing  it  with  several  other  books  having 
the  same  object  in  view,  I  am  free  to  say  that  it  is,  by  far,  the  best  of  all.  The 
'Table  of  Rules '  is  worth  the  cost  of  the  work."—  Thomas  Bowman,  D.  D.y 
Bishop  of  Baltimore  M.  E.  Conference. 

"  This   capital  little  manual  will  be  found  exceedingly  useful  by  all  who  are 
concerned  in  the  organization  or  management  of  societies  of  various  kinds.     . 
If  we  mistake  not,  the  book  will  displace  all  its   predecessors,  as  an  authority  on 
parliamentary  usages."— New  York  World. 

"I  admire  the  plan  of  your  work,  and  the  simplicity  and  fidelity  with  which 
you  have  executed  it.  It  is  one  of  the  best  compendiums  of  Parliamentary  Law 
that  I  have  seen,  and  exceedingly  valuable,  not  only  for  the  matter  usually 
embraced  in  such  a  book,  but  for  its  tables  and  incidental  matter,  which  serve 
greatly  to  adapt  it  to  common  use."— Dr.  D.  C.  Eddy,  Speaker  of  the  Massachu- 
setts House  of  Representatives . 


MISHAPS  OF  MR.  EZEKSEL  PELTER.-Mustrated. 

12mo,  cloth $1.50. 

"  So  ludicrous  are  the  vicissitudes  of  the  much-abused  Ezekiel,  and  so  much  of 
human  nature  and  every-day  life  intermingle,  that  it  will  be  read  with  a  hearty  zest 
for  its  morals,  while  the  humor  is  irresistible.  If  you  want  to  laugh  at  something 
new,  a  regular  side-splitter,  get  this  book."—  The  Evangelist,  St.  Louis. 

"  We  have  read  Ezekiel.  We  have  laughed  and  cried  over  its  pages.  It  grows 
in  interest  to  the  last  sentence.  The  story  is  well  told,  and  the  moral  so  good,  that 
we  decidedly  like  and  commend  it."— Pacific  Baptist,  San  Francisco. 


PUBLISHED   BY  S.   C.   GXIGGS  6-  CO.,   CHICAGO. 
PHILOSOPHY  OF  THE    PLAN   OF  SALVATION- 

By  Rev.  J.  B.  Walker,  D.D.,  with  an  Introductory  Essay  by  Calvin  E.  Stowe, 
D.D.  A  new  edition,  with  supplementary  chapter  by  the  author.  Sixty-seventh 
thousand,     i  vol.     nmo,     Price,  $1.50. 

"  Though  written  with  great  simplicity,  it  is  evidently  the  production  of  a 
master  mind.  *  *  and  few  works  are  more  adapted  to  bring  skeptics  of  a  certain 
class  to  a  stand.  *  *  It  is  the  disclosure  of  the  actual  process  of  mind  through 
v  hich  the  author  passes,  from  the  dark  regions  of  dc-obt  and  infidelity  to  the  clear 
light  and  conviction  of  a  sound  and  heartfelt  belief  of  the  truth  as  it  is  in  Jesus. 

"  There  is  in  many  parts  of  this  treatise,  a  force  of  argument  and  a  power  of 
conviction  almost  resistless. 

"  It  is  a  work  of  extraordinary  power.  *  *  We  think  it  is  more  likely  to 
lodge  an  impression  di  the  human  conscience,  in  favor  0/  the  divine  authority 
of  Christianity,  than  any  work  of  the  modern  press."—  London  Evangelical 
Magazine,  England. 

"  No  single  volume  we  ever  read  has  been  so  satisfactory  a  demonstration  of 
the  truth  of  religion,  or  has  had  so  strong  a  controlling  influence  over  our  habits 
of  thought.  *  *  No  better  book  can  be  put  into  the  hands  of  the  honest  and 
intellectual  skeptic.  It  is  overwhelmingly  convincing  to  reason,  and  leaves  the 
doubter  nothing  but  his  passions  and  prejudices  to  bolster  him  up.  *  *  Every 
minister's  library  should  have  a  copy."—  Tke  Methodist  Protestant,  Baltimore. 

"  It  fills  a  place  in  theological  literature  which  no  other  book  does.  It  is  the 
style  of  the  argument  which  gives  power,  impressiveness,  and  perennial  freshness 
to  this  production.  *  *  We  have  found  in  pastoral  experience  that  we  could 
place  no  better  uninspired  book  than  this  in  the  hands  of  intelligent  doubters,  or 
in  the  hands  of  new  converts,  for  their  aid  and  guidance.  Those  who  are  not 
familiar  with  it,  will  do  well  to  procure  a  copy  and  study  it  carefully.  It  is  worth 
more  than  some  large  libraries  to  those  who  read  for  their  profiting." — The  Christ- 
ian at  Work,  New  York. 


THE  DOCTRINE  OF  THE  HOLYSPIRIT;  Or  Phil- 
osophy of  the  Divine  Operation   in  the  Redemption 

Of  Man.— Being  volume  second  of  "The  Philosophy  of  the  Plan  of  Salvation." 
By  Rev.  J.  B.  Walker,  D.D.  Fourth  edition,  revised  and  enlarged.  Price, 
$1.50. 

"  The  author's  former  able  works  have  prepared  the  public  for  the  rich  treas- 
ures of  thought  in  this  volume.  It  is  a  book  of  foundation  principles,  and  deals  in 
the  verities  of  the  gospel  as  with  scientific  facts.  It  is  an  unanswerable  argument 
in  behalf  of  Christ's  life,  mission,  and  doctrine,  arid  especially  rich  in  its  teachings 
concerning  the  office  and  work  of  the  Spirit.  No  volume  has  lately  issued  from  the 
press  which  brings  so  many  timely  truths  to  the  public  attention.  While  it  is 
metaphysical  and  thorough,  it  is  also  clever,  forceful,  winning  for  its  grand  truth's 
sake,  and  every  way  readable.  The  author  has  wrought  a  great  work  for  the 
Christian  Church,  and  every  minister  and  teacher  should  arm  himself  with 
strong  weapons  by  perusing  the  arguments  of  this  book.  It  is  printed  and  bound 
in  the  exquisite  style  of  all  publications  which  issue  from  Messrs.  S.  C.  Griggs  &  Co.'s 
establishment."— Methodist  Recorder \  Pittsburgh. 


PUBLISHED  BY  S.   C.   GRIGGS  &  CO.,  CHICAGO. 
THE  WORLD  ON  WHEELS,  and  Other  Sketches.- 

By  Benj.  F.  Taylor.     Illustrated,     i  vol.,  i2mo.    Price,  $1.50. 

"  Full  of  humor  and  sharp  as  a  Damascus  blade." — Presbyterian,  Phil  a. 

"  The  pen-pictures  of  B.  F.  Taylor  are  among  the  most  brilliant  and  eccentric 
productions  of  the  day.  They  are  like  the  music  of  Gottschalk  played  by  Gotts- 
chalk  himself;  or  like  sky-rockets  that  burst  in  the  zenith,  and  fall  in  showers  of 
fiery  rain.  They  are  word-wonders,  reminding  us  of  necromancy,'with  the  dazzle 
and  bewilderment  of  their  rapid  succession."—  Chicago   Tribune. 

"Reader,  do  you  want  to  laugh?  Do  you  want  to  cry?  Do  you  want  to 
climb  the  Jacob's  ladder  of  imagination,  and  dwell  among  the  clouds  of  fancy  for 
a  little  while  at  least  ?  Do  you  ?  Then  get  B.  F.  Taylor's  World  on  Wheels,  read 
it,  and  experience  sensations  you  never  felt  before  !  *  *  It  is  a  book  of  '  word 
pictures,'  a  string  of  pearls,  the  very  poesy  of  thought."—  The  Christian,  St.  Louis. 

"Another  of  Benj.  F.  Taylor's  wonderful  word-painting  books.  *  *  In 
purity  of  style  and  originality  of  conception,  Taylor  has  no  superiors  in  this 
country.  The  book  before  us  is  a  gem  in  every  way.  It  is  quaint,  poetical,  melo- 
dious, unique,  rare  as  rare  flowers  are  rare.  He  has  an  exquisite  faculty  of  illustra- 
tion that  is  unsurpassed  in  the  whole  range  of  American  literature." — St.  Louis 
Dispatch. 

OLD-TIME  PICTURES  and  SHEAVES  of  RHYME. 

By  Ben'j.  F.  Taylor.     Red  line  edition,  small  quarto,  silk  cloth,  with  eight  fine 
full  page  illustrations. 

Price $2  00 

The  same,  full  gilt  edges  and  gilt  side 2  50 

John  G.  Whittier  writes  : — "  It  gives  me  pleasure  to  see  the  poems  of  B.  F. 
Taylor  issued  by  your  house  in  a  form  worthy  of  their  merit.  Such  pieces  as  the 
*  Old  Village  Choir?  '  The  Skylark?  l  The  Vane  on  the  Spire?  and  '  June? 
deserve  their  good  setting.  *  *  I  do  not  know  of  anyone  who  so  well  reproduces 
the  home  scenes  of  long  ago.     There  is  a  quiet  humor  that  pleases  me." 

"  Unless  it  be  Whittier,  we  know  of  no  American  poet  so  sweet,  tender  and 
gentle  in  his  lyrics  as  B.  F.  Taylor.  No  writer  of  to-day  sings  the  praises  of  rural 
life  and  scenery  as  eloquently,  and  we  do  not  wonder  that  many  of  his  poems  have 
become  classic.  The  holiday  volume  of  his  happy  verses,  Old  Time  Pictures  and 
Sheaves  of  Rhyme  is  a  very  eloquent  and  daintily  bound  volume,  and  comes  from 
that  growing  and  reliable  publishing  house  of  the  West,  S.  C.  Griggs  &  Company, 
of  Chicago.  Taking  up  this  handsomely  printed  book,  we  have  to  linger  on  the 
delightful  imagery  and  graceful  diction  of  its  pages,  glowing  as  they  are  with  pure 
and  tender  thoughts,  and  the  earnest,  indescribable  music  of  sunny  fields  and  rural 
joys.  *  *  No  one  can  read  it  but  will  be  the  better  for  so  doing."—  The  Albany 
Morning  Express. 


PUBLISHED  BY  S.  C.   GRIGGS  &  CO.,  CHICAGO. 
GERMAN  WITHOUT  GRAMMAR  OR  DICTIONARY.- 

According  to  the  Pestalozzian  Method  of  teaching  by  Object  Lessons.  By  Dr.  Zur- 
Brucke.     12mo,  half  bound.     Price,  50  Cents. 

"It  makes  the  study  of  German  as  much  a  recreation  as  a  task."— A7.  Y.  Weekly 
Tribune. 

"This  book  as  a  whole,  cannot  be  too  highly  praised,  and  should  sell  an  hundred 
thousand  a  year." — The  Church  Union,  New  York. 

"The  method  is  so  simple  that  any  English  teacher  with  a  little  instruction  in  the 
pronunciation  of  German,  can  handle  it." — Pennsylvania  School  jfournal. 

"I  like  the  arrangement  of  it  very  much.  It  seems  to  me  to  be  the  only  correct 
method  of  teaching  German." — Prof.  F.  B.  McClellan,  Superintendent  of  Schools, 
Albion,  Mich. 

"By  far  the  best  method  to  enable  pupils  to  acquire  familiarity  with  a  language, 
and  readiness  in  speaking  it.  The  little  volume  is  an  excellent  hand  book  for  teach- 
ers."— Boston  Commonwealth. 

"A  useful  little  manual.        *  *        It  is  admirably  adapted  to  its  purpose. 

The  book  has  been  in  successful  use  in  Chicago  Public  Schools,  where  it  has  been 
found  to  fulfill  its  object  in  the  most  satisfactory  manner."— Boston  Gazette. 

"Permit  me  to  acknowledge  the  receipt  of  the  excellent  little  book  you  sent  me. 
It  strikes  me  that  the  method  is  admirably  adapted  to  a  pleasant  and  rapid  acquaint- 
ance with  elementary  German  and  I  cannot  but  think  it  will  prove  successful  The 
course  is  very  attractive." — Prof.  At  C.  Kendrick,  D.  D.,  LL.  D  ,  University  of 
Rochester. 

"This  book  is  so  simple  and  straightforward  that  a  child  would  find  no  difficulty 
in  handling  it  from  the  beginning.  Children  of  all  ages  would  be  charmed  with  the 
novelty  of  the  method,  and  acquire  more  rapidly  under  it  and  grow  less  weary  with 
it,  than  probably  with  any  other  now  in  vogue  in  schools  and  classes." — The  Pub- 
lishers' Weekly,  N.  Y. 

"I  cannot  express  in  words  my  appreciation  of  your  little  book.  The  method  you 
adopt  is  the  only  one  by  which  Americans  can  learn  to  speak  the  German  language, 
and  the  admirable  arrangement  of  your  book  makes  it  peculiarly  adapted  to  the  use 
of  American  schools.  I  am  using  the  method  with  my  own  classes.  It  need  only  be 
known,  I  think,  in  order  that  it  may  be  appreciated  by  all  earnest  and  energetic 
teachers  who  would  give  their  pupils  the  most  thorough  knowledge  of  German  in  the 
least  possible  time." — W.  F.  Kerdolfl,  Prof  of  Languages,  Irving  Military  Aca- 
demy, Lake  View,  III. 

"  This  is  certainly  a  great  improvement  on  most  methods.  From  the  first  the 
pupil  speaks  German,  but  is  carried  along  easily  until  he  has  acquired  a  good  deal  of 
the  language.  For  young  pupils,  we  suspect  that  this  is  the  only  method;  and  it  is 
possible  that  adults  may  be  best  helped  by  it.  It  was  a  fault  of  old  books  used  by  us 
long  ago,  that  they  stranded  us  in  the  first  month  upon  the  only  rocks  in  that  whole 
sea — everything  hard  was  put  at  the  beginning.  Here,  nothing  is  hard,  and  the 
German  is  every  day  talk.  The  text  is  Roman,  a  great  point  in  its  favor." — The 
Methodist,  New  York. 


CALIFORNIA 
AT 

"  3LSS 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 
This  book  is  DUE  on  the  last  date  stamped  below 


j 


■ 

JUL  1 2  1980 


Form  L-9 
20nv-l,'42(S5M) 


HG 
253 

F28g_ 


Fawoett  - 
Gold  and  debt, 


1879 


1158  00377  4741 


DEMCO  234N 


\PP  9     1962 


EG 
253 

F28g 
1879 


wm 


